Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 10% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually.
What is the value of Rolen's preferred stock? Round your answer to the nearest cent.
$
Suppose interest rate levels have risen to the point where the preferred stock now yields 11%. What would be the new value of Rolen's preferred stock? Round your answer to the nearest cent.
$