Question
Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 7%, and its par value is $100.
Preferred stock valuation
Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 7%, and its par value is $100.
a What is the stock's value? Round your answer to two decimal places.
b Suppose interest rates rise and pull the preferred stock's yield up to 14%. What would be its new market value? Round your answer to two decimal places.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
