Wellington Industries pays an annual dividend rate of 9.20% on its preferred stock that currently returns 12.33% and has a par value of $100.00 per share. What is the value of Wellington's preferred stock?
 
a. $74.62 per share
b. $100.00 per share
c. $111.92 per share
d. $89.54 per share
 
Suppose that due to high inflation, interest rates rise and pull the preferred stock's yield to 16.03%. The value of the preferred stock will be _________.

 

13 Jan

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