Clinton's Preferred Stock Pays a Dividend of $1

question 60

Multiple Choice

Clinton's preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $50.00, what is its effective annual (NOT nominal) rate of return?

• A) 7.52%
• B) 7.76%
• C) 8.00%
• D) 8.24%

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Definitions:

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Signing Authority

The legal power granted to an individual or entity to sign official documents on behalf of another person or organization.

Breached Fiduciary Duty

A violation where a person in a position of trust fails to act in the best interests of another party they owe a duty to.

Breached Fiduciary Duty

Occurs when an individual who is legally bound to act in another's best interest fails to do so, violating their trust and responsibility.