a)
Original price =Dividend / yield
Original price = 10 / 0.04
Original price = $250
b)
Current value = Dividend / yield
Current value = 10 / 0.13
Current value = 76.92
c)
The yield have an inverse relationship with the price. When the yield declines, the price of the preferred stock will go up.
10) Southside Flights issued preferred stock many years ago. It carries a fixed dividend of $10...
X-Tech Company issued preferred stock many years ago. It carries a fixed dividend of $14 per share. With the passage of time, yields have soared from the original 10 percent to 17 percent (yield is the same as required rate of return). a. What was the original issue price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the current value of this preferred stock? (Do not round intermediate calculations. Round your answer to...
X-Tech Company issued preferred stock many years ago. It carries a foed 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 retum) a. What was the original issue price? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Original issue price b. What is the current value of this preferred stock? (Do not round intermediate calculations. Round...
North Pole Cruise Lines issued peeferred stock many years ago It camies a fixed dividend of $8 per share. With the passage of time, vields have soared from the original 12 percent to 9 percent (vied is the same as required rate of retum) a. What was the original ssue price? (Do not round intermediate calculations, Round your answer to 2 decimal places.) Original issue price b. What is the current value of this preferred stock? (Do not round intermediate...
Preferred Stock Valuation Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 10% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually. What is the estimated value of Rolen's preferred stock? Round your answer to the nearest cent. $ Suppose interest rate levels have risen to the point where the preferred stock now yields 13%. What would be the new estimated value of Rolen's preferred stock?...
(e) Wallace Container Company issued $100 par value preferred stock 12 years ago. The stock provided a 9 percent dividend yield at the time of issue. The preferred stock is now selling for $72. What is the cost of the preferred stock? (5 marks)
Wallace Container Company issued $100 par value preferred stock 10 years ago. The stock provided a 5 percent yield at the time of issue. The preferred stock is now selling for $76. What is the current yield or cost of the preferred stock? (Disregard flotation costs.) (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Question:A share of preferred stock for the Buford Pusser Baseball Bat Company just sold for $100 and carries an $8 annual dividend. a. What is the yield on this stock? b. Now assume that this stock has a call price of $110 in five years, when the company intends to call the issue.
Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 8% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually. What is the estimated value of Rolen's preferred stock? Round your answer to the nearest cent. Suppose interest rate levels have risen to the point where the preferred stock now yields 14%. What would be the new estimated value of Rolen's preferred stock? Round your answer to...
Cobra Banking Group issued preferred shares 10 years ago with a stated value of $95, and a dividend yield of 7%. What is the current price of each preferred share if the required return today is 15%?
All of the following accurately describe preferred stock except: Carries a fixed dividend rate Receives preference in distribution of dividends and/or distribution of assets upon liquidation Carries voting rights Is typically issued at par value Which of the following statements most accurately describes cumulative stock? A form of common stock in which the fixed dividend rate accumulates over time, if not paid A form of preferred stock in which the market value grows cumulatively, over time Any share of stock...