A Share of a Preferred Stock Pays a Dividend of $0.50

question 31

Multiple Choice

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

• A)8%
• B)6%
• C)12%
• D)14%
• E)10%