What should be the price of each preferred stock


Question: A firm has the following preferred stocks outstanding:

• PFD A: $32 annual dividend; $1,000 par value; no maturity

• PFD B: $88 annual dividend; $1,000 par value; maturity after twenty years

If comparable yields are 7.5 percent, what should be the price of each preferred stock?

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Finance Basics: What should be the price of each preferred stock
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