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Preferred stock valuation

Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 7%, 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 12%. What is its new market value? Round your answer to two decimal places.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92428434

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