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April 18, 2014

Homework Help: math

Posted by Robert on Monday, January 11, 2010 at 11:56am.

North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend of $6 per share. With the passage of time, yields have soared from the original 6 percent to 14 percent (yield is the same as required rate of return).

A. What was the original issue price?

B. What is the current value of this preferred stock?

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

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