You purchased 200 shares of preferred stock on January 1, 2002 for $42.27 per share. The stock pays an annual dividend of $7 per share. On December 31, 2002 the market price is $46.88 per
Share. What is your total dollar return for the year?

Question

Quizplus · Accepted Answer

Total dividend received = 200 shares * $7 per share = $1,400
Total market value at the end of the year = 200 shares * $46.88 per share = $9,376
Total cost of investment = 200 shares * $42.27 per share = $8,454

Total dollar return = Dividend + (Market value - Cost of investment)
= $1,400 + ($9,376 - $8,454)
= $2,322

You Purchased 200 Shares of Preferred Stock on January 1