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8% preferred stock issue outstanding with each share having a $100 face value. Currently, the yield is 10%. What is the market price per share? If interest rates in general shuld rise so that the required return becomes 12 %, what will happen to the market price per share.

2007-12-12 07:29:29 · 2 answers · asked by Anonymous in Business & Finance ➔ Investing

2 answers

Not enough info. You need to add some dates. If your stock pays $8/year, and the going market is paying %10... then your stock will probably be selling for about $80. If the going rate of return increases to 12%, then to pay 12% your stock would be valued at only $68.

2007-12-12 07:34:00 · answer #1 · answered by hasse_john 7 · 1⤊ 0⤋

you misspelled a word.

2007-12-12 15:33:47 · answer #2 · answered by Anonymous · 0⤊ 0⤋