Solitron Manufacturing Company preferred stock is selling for $14.If it has a yearly dividend of $1,what is your expected rate of return if you purchase the stock at its market price (round your answer to the nearest .1%,and assume no transaction costs)?

Question

Quizplus · Accepted Answer

The expected rate of return is calculated by dividing the annual dividend by the market price of the stock. Here, $1 / $14 = 0.0714, which is 7.1% when rounded to the nearest 0.1%.

Solitron Manufacturing Company Preferred Stock Is Selling for $14