What is the price of the straight preferred stock

Reference no: EM131792434

Question: Barnes Air Conditioning, Inc., has two classes of preferred stock: floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value of $100. The floating rate preferred stock pays an annual dividend yield of 6 percent, and the straight preferred stock pays 7 percent. Since the issuance of the two securities, interest rates have gone up by 2 percent for each issue. Both securities will pay their year-end dividend today.

a. What is the price of the floating rate preferred stock likely to be?

b. What is the price of the straight preferred stock likely to be?

Reference no: EM131792434

Questions Cloud

How much will the company be in arrears : If NHC earns $11,000,000 in the coming year after taxes but before dividends, and this is all paid out to the preferred stockholders.

Discuss double-declining-balance depreciation for buildings : transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during

Prepare the stockholders equity section of the balance sheet : Identify and analyze the effect of each transaction. Prepare the Stockholders' Equity section of the balance sheet

Compute the amount of the aftertax income : The treasurer of Kelly Bottling Company (a corporation) currently has $100,000 invested in preferred stock yielding 8 percent.

What is the price of the straight preferred stock : Barnes Air Conditioning, Inc., has two classes of preferred stock: floating rate preferred stock and straight (normal) preferred stock.

How scientists learn about global temperatures and climates : How scientists learn about past global temperatures and climates. One piece of data scientists offer to show that the climate is changing globally.

What is a joint cost and what is a separable cost : Question - What is a joint cost? What is a separable cost? Your answer to the topic should be in your own words

Is this income to barnie as compensation or nontaxable gift : Cleveland Co. makes widgets. It has a commission salesman, Barnie, who does a wonderful job. Is this income to Barnie as compensation, or a nontaxable gift

Write a research paper about cultural landscape : Write a Research paper about Cultural Landscape. Distance decay refers to the fact that influence and interaction between locations decreases.

User Account

All Pages