A preferred stock with a $5 dividend rate,$100 face value,and $80 market value has a current yield of

Name: A preferred stock with a $5 dividend rate,$100 face value,and $80 market value has a current yield of
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Question

Quizplus · Accepted Answer

Current yield is calculated by dividing the annual dividends by the market value of the stock. In this case, the annual dividends are $5 and the market value is $80. Therefore, the current yield is (5/80) x 100%, which is equal to 6.25%. Option B is the closest answer to this calculation.

A Preferred Stock with a $5 Dividend Rate,$100 Face Value,and