What will be the nominal rate of return on a preferred stock with a $25 par value,

Question:

What will be the nominal rate of return on a preferred stock with a $25 par value, a stated dividend of 7% of par, and a current market price of

(a) $16,

(b) $21,

(d) $37?

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...

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