What was the original issue price

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Reference no: EM13928004

X-Tech Company issued preferred stock many years ago. It carries a fixed dividend of $12 per share. With the passage of time, yields have soared from the original 9 percent to 14 percent (yield is the same as required rate of return).

a. What was the original issue price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Original issue price $

b. What is the current value of this preferred stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Current value $

c. If the yield on the Standard & Poor’s Preferred Stock Index declines, how will the price of the preferred stock be affected?

The price of preferred stock will increase.

The price of preferred stock will decrease.

Reference no: EM13928004

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