a. What is the value (i.e., price)of the following preferred stocks if the comparable yield is 10 percent?

MN Inc. $6 preferred stock, $100 par
ST Inc. $6 preferred stock, $100 par and the stock is to be retired after twenty years

b. What is the current yield offered by each preferred stock?

c. Why are the prices of these preferred stocks different even though they both pay the same dividend?

Question

a. What is the value (i.e., price)of the following preferred stocks if the comparable yield is 10 percent? 
 
    MN Inc. $6 preferred stock, $100 par     
    ST Inc. $6 preferred stock, $100 par and the stock is to be retired after twenty years 
 
b. What is the current yield offered by each preferred stock? 
 
c. Why are the prices of these preferred stocks different even though they both pay the same dividend?

Quizplus · Accepted Answer

The Answer of a. What is the value (i.e., price)of the following preferred stocks if the comparable yield is 10 percent? 
 
    MN Inc. $6 preferred stock, $100 par     
    ST Inc. $6 preferred stock, $100 par and the stock is to be retired after twenty years 
 
b. What is the current yield offered by each preferred stock? 
 
c. Why are the prices of these preferred stocks different even though they both pay the same dividend?

A What Is the Value (I