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lisov135 [29]
3 years ago
7

Ten years ago, Stigler Company issued $100 par value preferred stock yielding 6%. The preferred stock is now selling for $102 pe

r share. What is the approximate current yield or cost of the preferred stock
Business
1 answer:
Alik [6]3 years ago
4 0

Answer:

Current Yield = 0.05882 or 5.882% rounded off to 5.88%

Explanation:

A current yield refers to the annual return that a security provides based on the interest or dividend payments it makes expressed as a percentage of it current price. Thus, the current yield on preferred stock can be calculated as follow,

Current Yield - Preferred stock = Dividend per year / Current price

Dividend per year =  100 * 0.06 = $6 per year

Current Yield = 6 / 102

Current Yield = 0.05882 or 5.882% rounded off to 5.88%

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Suppose a participant in this experiment was expending $0 worth of effort in studying for each class before the experiment. Over
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