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Problem 17.21 (Algo) Borrowing funds to purchase preferred stock [LO17-5] Barnes Air Conditioning incorporated has two classes of preferred stock floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value of $100. The floating rate preferred stock pays an annual dividend yield of 8 percent, and the straight preferred stock pays 9 percent Since the issuance of the two securities, interest rates have gone up by 100 percent for each issue. Both securities will pay their year-end dividend today. a. What is the price of the floating rate preferred stock most likely to be? Note: Do not round intermediate calculations and round your answer to 2 decimal places. b. What is the price of the straight preferred stock likely to be? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Problem 17.21 (Algo) Borrowing funds to purchase preferred stock [LO17-5] Barnes Air Conditioning incorporated has two classes of preferred stock floating rate preferred stock and straight (normal) preferred stock. Both issues have a par value of $100. The floating rate preferred stock pays an annual dividend yield of 8 percent, and the straight preferred stock pays 9 percent Since the issuance of the two securities, interest rates have gone up by 100 percent for each issue. Both securities will pay their year-end dividend today. a. What is the price of the floating rate preferred stock most likely to be? Note: Do not round intermediate calculations and round your answer to 2 decimal places. b. What is the price of the straight preferred stock likely to be? Note: Do not round intermediate calculations and round your answer to 2 decimal places

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