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abc corporation $6 preferred stock trades at $110 a share. what is the current yield? a) 6.25% b) 11.00% c) 5.45% d) 22.00%

Sagot :

11.00% , The annual return on an investment (interest or dividends) is calculated by dividing it by the security's current market value. Instead than focusing on a bond's face value, this metric looks at its current price.

What is current yield?

Bonds and other fixed-interest securities, such gilts, are referred to by the terms current yield, interest yield, income yield, flat yield, market yield, mark to market yield, or running yield in finance.

The annual return on an investment (interest or dividends) is calculated by dividing it by the security's current market value. Instead than focusing on a bond's face value, this metric looks at its current price.

The proportion, expressed as a percentage, between the interest rate payable on a bond and its real market value. A bond with a current yield of 8%, for instance, would have a current market price of $1,000 and pay $80 annually.

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