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What should be the prices of the following preferred stocks if comparable securities yield 6 percent?...

What should be the prices of the following preferred stocks if comparable securities yield 6 percent? Use a calculator to answer the questions. Round your answers to the nearest cent. MN, Inc., $10 preferred ($80 par) $ CH, Inc., $10 preferred ($80 par) with mandatory retirement after 7 years $

Solutions

Expert Solution

Computation of preferred stock price
MN, Inc
Price = Annual dividend / Required rate
10/6%
$         166.67
ans = $         166.67
CH, Inc
We have to use financial calculator to solve this
put in calculator
FV 80
PMT 10
I 6%
N 7
Compute PV ($109.03)
Ans = $109.03

jeff jeffy answered 3 years ago
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