Asked by
Sarah Hipke
on Dec 20, 2024
Verified
If a share of preferred stock pays a quarterly dividend of $1.50, has a $40 par value, and is currently selling for $50.00, it is earning an annual return of:
A) 3.75%.
B) 3.00%.
C) 15.00%.
D) 12.00%.
Quarterly Dividend
A payment made by a corporation to its shareholders, usually as a distribution of profits, every three months.
Par Value
The face value of a bond or stock as stated by the issuer, which bears significance for accounting and financial regulation.
Annual Return
The percentage change in an investment's value over a year, considering both capital gains and dividends.
- Discriminate between common and preferred stocks based on dividends, returns, and their valuation in the financial market.
- Comprehend how market return rates affect the valuation of stocks and dividends.
Verified Answer
XM
Learning Objectives
- Discriminate between common and preferred stocks based on dividends, returns, and their valuation in the financial market.
- Comprehend how market return rates affect the valuation of stocks and dividends.