Ask Question
15 March, 03:07

Allison Corp. has just issued preferred stock with an annual dividend of $0.85. The preferred stock is currently selling for $18.75 per share. What is the annual yield or return (r) on this preferred stock?

+5
Answers (1)
  1. 15 March, 04:43
    0
    The return or yield on this preferred stock is 4.53%.

    Explanation:

    The yield is the effective rate of interest/dividend you receive on a preferred stock based on the current price at which the stock is trading at. Thus the formula for yield on a preferred stock can be written as:

    Yield or return on preferred stock = Dividend / Current share price

    Yield = 0.85 / 18.75 = 0.0453 or 4.53%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Allison Corp. has just issued preferred stock with an annual dividend of $0.85. The preferred stock is currently selling for $18.75 per ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers