Arondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3, and its current price is $79.

1. What is its nominal annual rate of return? Do not round your intermediate calculations. Round your answer to two decimal places.
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2. What is its effective annual rate of return? Do not round your intermediate calculations. Round your answer to two decimal places.

Answer rating: 100% (QA)

To find the nominal annual rate of return 1 Calculate the annual dividend by multiplying th... View the full answer