Question

The market price of a share of preferred stock is $ 49.15. The market uses a discount rate of 9.30% . What is the dividend? Answer format: Currency: Round to: 2 decimal places.

Answer 1

To find the dividend of a preferred stock, multiply the market price by the discount rate. With a market price of $49.15 and a discount rate of 9.30%, the dividend is $4.57 when rounded to two decimal places.

Step-by-step explanation:

To calculate the dividend for a share of preferred stock given its market price and the market discount rate, we can use the formula:

Dividend = Price × Discount Rate

For a market price of $49.15 and a discount rate of 9.30%, the calculation is:

Dividend = $49.15 × 0.093

Dividend = $4.57195

When rounded to two decimal places, the dividend is $4.57.