XTech issued preferred shares many years ago. They carry a fixed dividend of $6 per share. With the passage of time, yields have soared from the original 8 percent to 13 percent (yield is the same as required rate of return).

a. What was the original issue price? (Round the final answer to 2 decimal places.)

Original price of preferred share $

b. What is the current value of a XTech preferred share? (Round the final answer to 2 decimal places.)

Current price of preferred share $

c. If the yield on the Preferred Stock Index declines, how will the price of these preferred shares be affected?

multiple choice

• The price of preferred stock will increase.

• The price of preferred stock will decrease.