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Barnes Air Conditioning Inc. has two classes of preferred stock: floating rate preferred stock and straight...

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Finance

Barnes Air Conditioning Inc. has two classes of preferred stock:floating rate preferred stock and straight (normal) preferredstock. Both issues have a par value of $100. The floating-ratepreferred stock pays an annual dividend yield of 4 percent, and thestraight preferred stock pays 5 percent. Since the issuance of thetwo securities, interest rates have gone up by 1.00 percent foreach issue. Both securities will pay their year-end dividendtoday.

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Barnes Air Conditioning Inc. has two classes of preferred stock:floating rate preferred stock and straight (normal) preferredstock. Both issues have a par value of $100. The floating-ratepreferred stock pays an annual dividend yield of 4 percent, and thestraight preferred stock pays 5 percent. Since the issuance of thetwo securities, interest rates have gone up by 1.00 percent foreach issue. Both securities will pay their year-end dividendtoday.

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