Preferred stock valuation

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Reference no: EM13879404

Preferred Stock Valuation

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 9% of its $100 par value. Preferred stock of this type currently yields 10%. Assume dividends are paid annually.

What is the value of Rolen's preferred stock? Round your answer to the nearest cent.

Suppose interest rate levels have risen to the point where the preferred stock now yields 14%. What would be the new value of Rolen's preferred stock? Round your answer to the nearest cent.

Reference no: EM13879404

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