1. What is the value of a preferred stock when the dividend rate is 12 percent on a $125 par? value? The appropriate discount rate for a stock of this risk level is 10 percent. the value of the preferred stock is ______ ?(Round to the nearest? cent.)
2. A 10,000 par value 10-year bond with 8% annual coupons is bought at a premium to yield an annual effective rate of 6%. Calculate the amount of amortization of premium in the 7th year.