An Issue of Preferred Stock That Pays an Annual Dividend

question 7

Multiple Choice

An issue of preferred stock that pays an annual dividend of $6 is selling for $32 a share. The annual return on this investment is

• A)18.75%.
• B)5.33%.
• C)4.33%.
• D)8.75%.

---

Definitions:

Percentage

A portion of a whole expressed as a number between 0 and 100 rather than as a fraction.

Hectares

A metric unit of square measurement equal to 10,000 square meters, commonly used in agriculture and land measurement.

Land

The part of the earth's surface that is not covered by water, often considered in terms of its ownership or use.

Purchase

The act of buying goods or services, often involving a legal transaction between a buyer and a seller.