Answer:
9.78%
Explanation:
Given that:
Current Trade price per share =$45
Par value = $30.00
Annual dividend = $4.40
The rate of return of a preferred stock = [tex]\dfrac{Dividend}{ Current \ trade \ Price}[/tex]
The rate of return of a preferred stock = [tex]\dfrac{4.40}{45 }[/tex]
The rate of return of a preferred stock = 0.097777
The rate of return of a preferred stock = 9.7777%
The rate of return of a preferred stock [tex]\simeq[/tex] 9.78%
