WHAT WILL BE THE NOMINAL RATE OF RETURN ON A PREFERRED STOCKWITH A
$100 PAR VALUE, A STATED DIVIDEND OF 8 PERCENT OF PAR, AND ACURRENT
MARKET PRICE OF (A) $60, (B) $80, (C) $100, (D) $140?
PREFERRED STOCK VALUATION Ezzell Corporation issued perpetual preferred stock with
a 10% annual dividend. The stock currently yields 8%, and its par value is $100.
a. What is the stock's value?
b. Suppose interest rates rise and pull the preferred stock's yield up to 12%. What is its new