Calculate the current market price of bond

Reference no: EM1367019

Omega or Alpha Limited sold a Preferred stock issue three years ago. This Preferred stock has a maturity twenty years from its issue date and pays a $3.00 annual dividend which provides a 12% to its original investors. Since this Preferred stock was sold interest rates (our old friend krf) have increased, and if O / A were to sell like Preferred stock today it would carry a 15% return to its original investors.

Calculate the current market price of this issue of O / A's Preferred stock.

Reference no: EM1367019

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