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Alexxandr [17]
4 years ago
15

Alcott's preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $45.00, what is its nominal (not eff

ective) annual rate of return?
Business
1 answer:
harina [27]4 years ago
5 0

Answer:

= 8.89%

Explanation:

T<em>h rate of return on a preferred stock is the dividend divided by the price of the stock multiplied by 100</em>

<em>Return = Dividend/price × 100</em>

Quarterly dividend = $1

<em>Annual dividend </em>

= 1 × 4 ( Note there are four quarters in year)

= $4

<em>Annual rate of  return</em>

= (4/45)× 100

= 8.89%

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