An 8 percent preferred stock with a market price of $110 per share and a $100 par value pays a cash dividend of __________.

Question

Quizplus · Accepted Answer

The dividend yield can be calculated by dividing the annual dividend by the market price per share. The annual dividend is 8% of the par value, which is $8 ($100 x 0.08). So the dividend yield is $8/$110, which is approximately 0.0727, or 7.27%. Therefore, the cash dividend is $8 per share.

An 8 Percent Preferred Stock with a Market Price of $110