The VIC Co.has preferred stock outstanding that pays a $4.50 dividend annually and sells for $48.20 per share.What is the rate of return?

Name: The VIC Co.has preferred stock outstanding that pays a $4.50 dividend annually and sells for $48.20 per share.What is the rate of return?
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Quizplus · Accepted Answer

The rate of return is calculated by dividing the annual dividend by the share price. In this case, the annual dividend is $4.50 and the share price is $48.20. Therefore, the rate of return is $4.50/$48.20 = 9.34%.