Problem 9-8 Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 8% annual dividend....

Question

Question

Problem 9-8 Preferred stock valuation Ezzell Corporation issued perpetual preferred stock with a 8% annual dividend. The stoc

Answer 1

Answer #1

Annual dividend=100*8%=8

Stock value=Annual dividend/Current yield

a.Stock value=8/0.06=$133.33(Approx).

b.Stock value=8/0.14=$57.14(Approx).

Answer 2

Similar Homework Help Questions

Problem 9-8 Preferred stock valuation Earley Corporation issued perpetual preferred stock with a 9% annual dividend....

Problem 9-8 Preferred stock valuation Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 6 % , 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 is its new market value? Round your answer to two decimal places. $
Ezzell Corporation issued perpetual preferred stock with a 8% annual dividend. The stock currently yields 7.8%,...

Ezzell Corporation issued perpetual preferred stock with a 8% annual dividend. The stock currently yields 7.8%, and its par value is $55. Suppose interest rates rise and pull the preferred stock's yield up to 10.5%. What is its new market value?
Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 8%,...

Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 8%, and its par value is $100. a) What is the stock's value ? b) Suppose interest rates rise and pull the preferred stock's yield up to 12%. What is its new market value ?

Earley Corporation issued perpetual preferred stock with a 8% annual dividend. The stock currently yields 10%,...

Earley Corporation issued perpetual preferred stock with a 8% annual dividend. The stock currently yields 10%, and its par value is $100. What is the stock's value? Round your answer to two decimal places. $_____ Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? Round your answer to two decimal places. $_____
Ezzell Corporation issued perpetual preferred stock with a 10percent annual dividend.

Ezzell Corporation issued perpetual preferred stock with a 10percent annual dividend. The stock currently yields 8 percent, and it's par value is $100.a) What is the stock's value?b) Suppose interest rates rise and pull the preferred stock's yield up to 12 percent. What would be its new market value?
Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 8%,...

Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 8%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? $ b. Suppose interest rates rise and pull the preferred stock's yield up to 12%. What is its new market value? $

Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently yields 6%,...

Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently yields 6%, and its par value is $100. Round your answers to the nearest cent a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 11%. What is its new market value?
Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 6%,...

Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 6%, and its par value is $100. Round your answers to the nearest cent. What is the stock's value? $ Suppose interest rates rise and pull the preferred stock's yield up to 11%. What is its new market value? $ 9.11
Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 7%,...

Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. what is the new market value?

9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields...

9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? $ Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its...