Question

What should be the prices of the following preferred stocks if comparable securities yield 3 percent? Use Appendix B and Appendix D to answer the questions. Round your answers to the nearest cent.

a. MN, Inc., $11 preferred ($90 par)

$______

b. CH, Inc., $11 preferred ($90 par) with mandatory retirement after 10 years

$_______

Appendix B

$Appendix_B.jpg$

Appendix D

$Appendix_D.jpg$

Answer 1

a. MN, Inc., $11 preferred ($90 par)

=11/3%
=366.66667

b. CH, Inc., $11 preferred ($90 par) with mandatory retirement after 10 years

=11*8.530+90*0.744
=160.79000