If a Share of Preferred Stock Pays a Quarterly Dividend

question 138

Multiple Choice

If a share of preferred stock pays a quarterly dividend of $1.50, has a $40 par value, and is currently selling for $50.00, it is earning an annual return of:

• A)3.75%.
• B)3.00%.
• C)15.00%.
• D)12.00%.

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Definitions:

Strategic Management Approach

A management framework that involves setting objectives, analyzing competitive environments, assessing internal organization, evaluating strategies, and ensuring management oversight of strategy execution.

Cost Leadership

A business strategy focused on achieving the lowest operational costs within an industry, thereby allowing the company to offer its products or services at a lower price than its competitors.

Small Company

A business with a limited number of employees and relatively low volume of sales compared to larger enterprises.

Porter's Generic Strategies

A framework developed by economist Michael Porter that outlines three potential strategies—cost leadership, differentiation, and focus—for achieving competitive advantage.