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Problem:

Several years ago, Bedford Company issued preferred stock with an $8 annual dividend. At the time of original issue, similar preferred stock in the marketplace was sold at a rate of return of 8%, but now yields on similar preferred stock offerings are 6%.

Required:

Question 1: What was the price of the Bedford Corp preferred stock when it was originally issued?

Question 2: What is the price of the preferred stock in the market today?

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167312

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