Welcome to Westonci.ca, where you can find answers to all your questions from a community of experienced professionals. Get the answers you need quickly and accurately from a dedicated community of experts on our Q&A platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.
Sagot :
The investor can expect to receive a return of 11.01% on this stock if the stock is purchased today
Preferred stock is a class of ownership that has priority claims to retained earnings, relative to common equity owners. Suppose the preferred stock pays a constant dividend D, and the required rate of return that is r, then the price of the preferred stock is D/r.
Dividend payment = par value * dividend rate
= 100*15.25% = $15.25.
The price of the stock = 15.25 / rate of return = 138.5, which implies that the rate of return = 11.01%.
Hence, the rate of return of the stock is 11.01%
Learn more about shares:
https://brainly.com/question/28392295
#SPJ4
We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
