The preferred stock of Marble Comics currently sells for $31.25 per share. The annual dividend of $2.50 is ﬁxed. Assuming a constant dividend forever, what is the rate of return on this stock?

Question

Quizplus · Accepted Answer

The rate of return can be calculated using the formula: Rate of return = Dividend / Price of stock. Plugging in the given values, we get: Rate of return = 2.50 / 31.25 = 0.08 or 8%. Therefore, option C is the correct choice.

The Preferred Stock of Marble Comics Currently Sells for $31