Final answer:
The annual rate of return on the investment in preferred stock, which pays an annual dividend of $5.60 per share and was purchased at $60.00, is calculated to be 9.33%.
Step-by-step explanation:
To calculate the annual rate of return on your investment when you purchase preferred stock, you can use the formula for dividend yield, which is the annual dividend per share divided by the price per share you paid for the stock. In this case, the annual dividend is $5.60 and the purchase price is $60.00. Thus, the annual rate of return is calculated as $5.60 divided by $60.00.
The calculation would be:
Annual Rate of Return = ($5.60 ÷ $60.00) × 100 = 9.33%
Therefore, the annual rate of return on your investment in this preferred stock is 9.33%.