Question

There is a preferred stock that pays a dividend of $5.00 at the end of each year. The stock sells for $60.00 a share. What is the oreferred stocks require rate of return?

Answer 1

(5/60) is the dividend as a fraction of the price
to go from fraction to percent, multiply by 100

Answer 2

5/60 = 0.083 = 8.3%

Answer 3

Dani's just paid an annual dividend of $6 per share. What is the dividend expected to be in five years if the growth rate is 4.2%?

Answer 4

$7.97