Tando Airlines has preferred stock outstanding that has a par value equal to $100. Preferred dividend payments

Question:

Tando Airlines has preferred stock outstanding that has a par value equal to $100. Preferred dividend payments equal 8 percent of the stock’s par value. If Tando’s preferred stock currently sells for $160, what is the rate of return that preferred stockholders earn? What portion of this return is the dividend yield and what portion is the capital gains yield?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...