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How much are the company preferred shares worth

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Reference no: EM133096877

Question - Ezzell Corporation issued preferred shares with a declared dividend of 10% at face value. These types of securities produce 8% today, and their face value is $ 100. Assume that dividends are paid annually.

How much are the company's preferred shares worth?

Suppose the level of interest rates reaches a point where they yield 12% at present. How much will your preferred shares be worth?

Reference book: Corporate Finance: A Focused Approach by Ehrhardt and Brigham Second Edition.

Reference no: EM133096877

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