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# Preferred Value of Stock

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North Pole Cruise Lines issued preferred stock many years ago. It carres a fixed dividend of \$6.00 per share. With the passage of time, yields have soared from the original 6 percent to 14 percent (yield is the same as the 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 stock be affected?

Please explain how you arrived at these solutions by showing steps. This is going to be the only way I am going to make sense of how to replicate this formula to solve other similar problems on my own. Thank you for your help.

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North Pole Cruise Lines issued preferred stock many years ago. It carres a fixed dividend of \$6.00 per share. With the passage of time, yields have soared from the original 6 percent to ...

#### Solution Summary

Preferred Value of Stock is calculated.

\$2.49