Interest rates rise and pull preferred stock yield

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Reference no: EM132050234

Preferred stock valuation

Earley Corporation issued perpetual preferred stock with a 9% annual dividend. The stock currently yields 8%, 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.

Reference no: EM132050234

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