The preferred stock of Deep South Pies pays an annual dividend of $1.40 and sells for $18.20 a share. What is the rate of return on this security?

Name: The preferred stock of Deep South Pies pays an annual dividend of $1.40 and sells for $18.20 a share. What is the rate of return on this security?
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Quizplus · Accepted Answer

The rate of return on the preferred stock is calculated by dividing the annual dividend by the price per share. So, $1.40 / $18.20 = 0.0769 or 7.69%.

The Preferred Stock of Deep South Pies Pays an Annual