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In which case did the price of the stock change?

In which case did the price of the stock change?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

What should be the prices of the following preferred stocks if comparable securities yield 4 percent? Use Appendix B and Appendix D to answer the questions. Round your answers to the nearest cent.

MN, Inc., $8 preferred ($120 par)

$  

CH, Inc., $8 preferred ($120 par) with mandatory retirement after 7 years

$  

What should be the prices of the following preferred stocks if comparable securities yield 8 percent? Round your answers to the nearest cent.

MN, Inc., $8 preferred ($120 par)

$  

CH, Inc., $8 preferred ($120 par) with mandatory retirement after 7 years

$  

In which case did the price of the stock change?

As with the valuation of bonds, an increase in interest rates causes the value of preferred stock to -Select-fallriseItem 5 .

In which case was the price more volatile?

While the prices of both preferred stocks -Select-declinedincreasedItem 6 , the price of the -Select-perpetual preferred stockstock with mandatory retirementItem 7 was more volatile.

PB 1.2 Defining Strategic Manag x Pop-a-Lock - EverybodyWik x G pop-a-lock net worth - Goo x b Answered: You are consideri x * MindTap - Cengage Learning x * Appendix_B.jpg (890x565) x + A sjc.cengagenow.com/ilrn/books/mabf12h/Appendix_B.jpg Interest Factors for the Present Value of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 24% 28% 1 990 980 971 962 952 943 935 926 917 909 .893 .877 .870 862 .847 833 806 781 2 980 961 943 925 907 .890 .873 .857 .842 .826 797 743 .769 756 .675 718 .694 .650 .610 3 971 942 915 .889 .864 .840 .816 .794 772 751 .712 .658 641 .609 579 524 477 4 961 .924 .889 .855 823 .792 .763 735 708 683 .636 .592 .572 .552 .516 482 423 373 5 951 .906 .863 .822 .784 .747 713 .681 .650 .621 567 519 497 476 .437 .402 341 .291 6 942 888 .838 .790 746 .705 .666 .630 596 .564 .507 456 432 410 370 .335 .275 .227 7 933 871 .813 .760 .711 .665 .623 583 547 513 452 400 376 354 314 .279 222 .178 8 .923 .853 .266 .789 .766 .731 .677 .645 .627 .582 540 502 467 404 .351 327 305 .233 .179 .139 .108 .085 9 914 .837 .703 .592 558 544 500 460 424 361 308 284 263 .226 .194 .144 10 905 820 .744 .676 .614 508 .463 422 386 322 .270 247 227 .191 .162 .116 11 .896 .804 .722 .650 585 .527 475 429 388 350 287 .237 215 .195 .162 135 .094 .066 12 887 788 .701 .625 .557 .497 444 .397 .356 .319 257 208 .187 .168 .137 .112 .076 .052 13 879 773 .681 .601 .530 469 415 .368 326 .290 .229 .182 .163 .145 .116 .093 .061 .040 .661 .388 362 14 870 758 577 505 .442 340 .299 .263 205 .160 .140 .141 .125 .099 .078 .049 .032 15 861 743 .642 555 .481 417 315 275 239 .183 .123 .108 084 .065 040 .025 .093 .080 .218 .123 .108 16 853 .728 .623 534 .458 .436 .394 339 .292 .252 .163 107 .071 .054 .032 .019 17 844 714 .605 .513 .371 317 .270 .231 .198 .146 .093 .060 .045 .026 .015 .836 .828 .350 331 312 296 276 258 18 .700 587 494 416 250 .212 .180 .164 .130 .095 .081 .069 .051 .038 .021 .012 396 377 .194 .178 19 .686 570 475 .009 .232 .215 .116 .083 .070 .060 .043 .031 .017 20 .820 .673 554 456 .149 .104 073 .061 .051 .037 .026 .014 .007 25 .780 .610 478 .375 .295 .233 .184 .146 .116 .092 .059 .038 .030 024 .016 .010 .005 .002 30 742 552 412 308 .231 174 .131 .099 .075 .057 .033 .020 015 .012 .007 .004 .002 .001
Transcribed Image Text:PB 1.2 Defining Strategic Manag x Pop-a-Lock - EverybodyWik x G pop-a-lock net worth - Goo x b Answered: You are consideri x * MindTap - Cengage Learning x * Appendix_B.jpg (890x565) x + A sjc.cengagenow.com/ilrn/books/mabf12h/Appendix_B.jpg Interest Factors for the Present Value of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 24% 28% 1 990 980 971 962 952 943 935 926 917 909 .893 .877 .870 862 .847 833 806 781 2 980 961 943 925 907 .890 .873 .857 .842 .826 797 743 .769 756 .675 718 .694 .650 .610 3 971 942 915 .889 .864 .840 .816 .794 772 751 .712 .658 641 .609 579 524 477 4 961 .924 .889 .855 823 .792 .763 735 708 683 .636 .592 .572 .552 .516 482 423 373 5 951 .906 .863 .822 .784 .747 713 .681 .650 .621 567 519 497 476 .437 .402 341 .291 6 942 888 .838 .790 746 .705 .666 .630 596 .564 .507 456 432 410 370 .335 .275 .227 7 933 871 .813 .760 .711 .665 .623 583 547 513 452 400 376 354 314 .279 222 .178 8 .923 .853 .266 .789 .766 .731 .677 .645 .627 .582 540 502 467 404 .351 327 305 .233 .179 .139 .108 .085 9 914 .837 .703 .592 558 544 500 460 424 361 308 284 263 .226 .194 .144 10 905 820 .744 .676 .614 508 .463 422 386 322 .270 247 227 .191 .162 .116 11 .896 .804 .722 .650 585 .527 475 429 388 350 287 .237 215 .195 .162 135 .094 .066 12 887 788 .701 .625 .557 .497 444 .397 .356 .319 257 208 .187 .168 .137 .112 .076 .052 13 879 773 .681 .601 .530 469 415 .368 326 .290 .229 .182 .163 .145 .116 .093 .061 .040 .661 .388 362 14 870 758 577 505 .442 340 .299 .263 205 .160 .140 .141 .125 .099 .078 .049 .032 15 861 743 .642 555 .481 417 315 275 239 .183 .123 .108 084 .065 040 .025 .093 .080 .218 .123 .108 16 853 .728 .623 534 .458 .436 .394 339 .292 .252 .163 107 .071 .054 .032 .019 17 844 714 .605 .513 .371 317 .270 .231 .198 .146 .093 .060 .045 .026 .015 .836 .828 .350 331 312 296 276 258 18 .700 587 494 416 250 .212 .180 .164 .130 .095 .081 .069 .051 .038 .021 .012 396 377 .194 .178 19 .686 570 475 .009 .232 .215 .116 .083 .070 .060 .043 .031 .017 20 .820 .673 554 456 .149 .104 073 .061 .051 .037 .026 .014 .007 25 .780 .610 478 .375 .295 .233 .184 .146 .116 .092 .059 .038 .030 024 .016 .010 .005 .002 30 742 552 412 308 .231 174 .131 .099 .075 .057 .033 .020 015 .012 .007 .004 .002 .001
PB 1.2 Defining Strategic x A Pop-a-Lock - Everybo x G pop-a-lock net worth b Answered: You are con x * MindTap - Cengage Le X * Appendix_D.jpg (919x x * Appendix_B.jpg (890x X + A sjc.cengagenow.com/ilrn/books/mabf12h/Appendix_D.jpg Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 4. 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6. 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 9. 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778
Transcribed Image Text:PB 1.2 Defining Strategic x A Pop-a-Lock - Everybo x G pop-a-lock net worth b Answered: You are con x * MindTap - Cengage Le X * Appendix_D.jpg (919x x * Appendix_B.jpg (890x X + A sjc.cengagenow.com/ilrn/books/mabf12h/Appendix_D.jpg Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 4. 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6. 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 9. 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778
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