Preferred Stock Valuation
Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 9% of its $100 par value. Preferred stock of this type currently yields 10%. Assume dividends are paid annually.
What is the value of Rolen's preferred stock? Round your answer to the nearest cent.
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Suppose interest rate levels have risen to the point where the preferred stock now yields 14%. What would be the new value of Rolen's preferred stock? Round your answer to the nearest cent.