Preferred stock valuation

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Reference no: EM131831126

Preferred Stock

Preferred Stock Valuation

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 12% of its $100 par value. Preferred stock of this type currently yields 10%. Assume dividends are paid annually.

What is the estimated 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 13%. What would be the new estimated value of Rolen's preferred stock? Round your answer to the nearest cent. $

Reference no: EM131831126

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