# Question: Repeat the previous problem but assume that comparable yields are

Repeat the previous problem but assume that comparable yields are 10 percent.

Previous problem

What should be the prices of the following preferred stocks if comparable securities yield 7 percent? Why are the valuations different?

a. MN Inc., $8 preferred ($100 par)

b. CH Inc., $8 preferred ($100 par) with mandatory retirement after

20 years

Previous problem

What should be the prices of the following preferred stocks if comparable securities yield 7 percent? Why are the valuations different?

a. MN Inc., $8 preferred ($100 par)

b. CH Inc., $8 preferred ($100 par) with mandatory retirement after

20 years

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