A Share of Preferred Stock Pays a Dividend of $0

question 34

Multiple Choice

A share of preferred stock pays a dividend of $0.50 each quarter. If you are willing to pay $20.00 for this preferred stock, what is your nominal (not effective) annual rate of return?

• A) 10%
• B) 8%
• C) 6%
• D) 12%
• E) 14%

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Definitions:

Philosophy

The study of the fundamental nature of knowledge, reality, and existence, especially when considered as an academic discipline.

Epictetus

A Greek Stoic philosopher who emphasized the importance of personal freedom and responsibility in achieving happiness.

Hedonism

A philosophical theory suggesting that pleasure or happiness is the highest good and utmost aim of human life.

Epicurus

An ancient Greek philosopher who founded Epicureanism, a philosophy that taught the pursuit of happiness through the elimination of pain and fear, emphasizing simple pleasures, friendship, and a contemplative life.