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

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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 ?

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Answer 1

Answer #1

For preferred stock

Price= Dividend /Yield 10/.08= 125

10/.12= 83.33

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Answer 2

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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 10percent annual dividend.

Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 8%,...

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

Earley Corporation issued perpetual preferred stock with an 11% annual dividend. The stock currently yields 10%,...

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

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

Earley Corporation issued perpetual preferred stock with an 11% annual dividend. The stock currently yields 7%,...

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 7%,...

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

Homework Answers

Add Answer to: Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 8%,...

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Add Answer to:
Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 8%,...