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What was the original issue price

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    Assignment ID: FG133050117

    Question – North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend of $8 per share. With the passage of time, yields have changed from the original 9 percent to 7 percent (yield is the same as required rate of return).

    a. What was the original issue price?

    b. What is the current value of this preferred stock?

    c. If the yield on the Standard & Poor’s Preferred Stock Index declines, how will the price of the preferred stock be affected?

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