Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, 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 13%. What would be its new market value? Round your answer to two decimal places. $

Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, 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 13%. What would be its new market value? Round your answer to two decimal places. $

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 14P

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