1. Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. If D0 = $3 and rs = 13%, what is the value of Maxwell Mining's stock? Round your answer to the nearest cent. = $ 2. Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 8%, and its par value is $100. Round your answers to the nearest cent. a.What is the stock's value? = $ b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? = $
1. Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. If D0 = $3 and rs = 13%, what is the value of Maxwell Mining's stock? Round your answer to the nearest cent.
= $
2. Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 8%, and its par value is $100. Round your answers to the nearest cent.
a.What is the stock's value?
= $
b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value?
= $
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