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Question regarding the preferred stock valuation

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Preferred stock valuation

Earley Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 8%, and its par value is $100.

  1. What is the stock's value? Round your answer to two decimal places. 
  2. 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: EM131101050

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