Over the recent holiday you met an individual named Jeff who was raving about the great price they paid for shares of stock in BlueFin Industries. According to Jeff the stock carries a bit of risk in that it can be redeemed by the issuing company, but holds the benefits of a definite dividend calculated at 2% of the stock's par value. Unfortunately, per Jeff, he received no rights to make decisions on board members, or major issues brought before the company.
What kind of stock did Jeff buy?
A. Convertible preferred stock
B. Callable common stock
C. Callable preferred stock
D. Participating preferred stock
E. Treasury stock
2. On June 1, 2002, Ringo purchased $260,000 of McCartney, Co. 10% 20-year bonds at face value. McCartney has paid the annual interest due on the bonds regularly. On June 1, 2012 market interest rates had decreased to 8% and Ringo needs to sell his bonds.
What is the market value of Ringo's bonds at June 1, 2012?
A. $260,000
B. $294,894.60
C. None of the other answers
D. $259,989.60
E. $1,759,669.20