Perpetual preferred stock-what is its new market value

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Preferred stock valuation Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 9%, and its par value is $100.

a. What is the stock's value? Round your answer to two decimal places.

b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? Round your answer to two decimal places.

Reference no: EM131354543

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