Question

You bought a share of 4% preferred stock for $96.80 last year. The market price for...

You bought a share of 4% preferred stock for $96.80 last year. The market price for your stock is now $98.64. What was your total return for last year?

For this problem i want to make sure that i am doing it correctly. I got 6.03%, would this be correct? If not, can you give me a step by step on how to find the answer? Thank you!!

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Answer #1

Par value of Preferred stock = $100

Dividend rate = 4%

Preferred dividend amount(D) = 100*0.04 = $4

Last year price(P0) = $96.80

Current Price(P1) = $98.64

Total Return for last year (R):

Yes, 6.03% is correct.

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