What the preferred stockholders must be paid

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Problem 1: Assume it is 2 July 2020. A 1,000,000 zero-coupon bond matures on July 1, 2023. Calculate the fair price of this bond when the redemption yield is 12% annually and 6% semi-annually.

Problem 2: A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid _________ prior to paying the common stockholders.

Reference no: EM132757232

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