Answer:
The answer to the question is YES
Step-by-step explanation:
What is Return on Investment (ROI)?
Return on investment (ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the ratio, the greater the benefit earned.
Therefore, the formula to find the Return on Investment for the question - The ZZZ Corporation has preferred stock. The preferred stock pays a dividend per share every year of $6.50. The stock sells for $81.25 per share. TRUE or FALSE: The required return of investors in the stock is 8%.
ROI = Net Profit ÷ Total Investment x 100
∴ $6.50 = Net Profit (Yearly Dividend par share);
$81.25 = Total Investment (Market Price of the stock);
Applying the formula: 6.50/81.25 x 100 =7.97≅ 8% (approximately)