A share of preferred stock has a par value of $100, an annual dividend of 2% and a current market price of $67. What is the rate of return on the preferred stock?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 10P
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A share of preferred stock has a par value of $100, an annual dividend of 2% and a current market price of $67.

What is the rate of return on the preferred stock?

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