Bueno Media preferred stock shares pay a $4 annual dividend and sell for $57.14 per share.What is the current required rate of return for their shares?
A)7.00%
B)6.93%
C)6.51%
D)5.29%

Question

Quizplus · Accepted Answer

The current required rate of return can be calculated using the formula for the dividend yield on preferred stock, which is the annual dividend divided by the current price per share. So, it's $4 / $57.14 = 0.07, or 7.00%.

Bueno Media Preferred Stock Shares Pay a $4 Annual Dividend