How much does share of preferred stock cost today

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Reference no: EM131994102

1. Maintenance costs for a new piece of mining equipment are expected to be $25,000 in the first year, rising by $1000/yr thereafter. The machine has a life of 8 years and the interest rate is 12 % compounded annually. To evaluate bids, you need to know the present value of these costs. What is this value?

2. E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $22 in perpetuity, beginning 11 years from now. If the market requires a return of 3.6 percent on this investment, how much does a share of preferred stock cost today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131994102

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