Suppose a preferred stock pays a quarterly dividend of $2 per share. The next dividend comes in exactly one-fourth of a year. If the price of the stock is $80, what is the effective annual rate of return that the stock offers investors?
Answer to relevant QuestionsIn Chapter 4, we defined several bond return measures, including the coupon, the coupon rate, the coupon yield, and the yield to maturity. Indicate whether each of these measures (a) focuses on the total return or just one ...In Table, why are the average real returns lower than the average nominal returns for each asset class? Is it always true that an assets nominal return is higher than its real return? Notice in Figure that 1981 was the top year for nominal bill returns and 1982 was the top year for nominal bond returns. Why do you think that these two years saw such high returns on bonds and bills? At the end of each line, we show the nominal value in 2006 of a $1 investment in stocks, bonds, and bills. Calculate the ratio of the 2006 value of $1 invested in stocks divided by the 2006 value of $1 invested in bonds. Now ...If a particular stock had no systematic risk, only un-systematic risk, what would be its expected return?
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