Question

XYZ company has preferred stock that has an annual dividend of $5.If the current market price of a preference share is $30. What is the cost of preference share

Answer 1

Answer:

Preferred Share Annual Dividend Formula

To find the annual dividend, multiply the par value by the dividend rate. For example, if thepreferred shares have a par value of $50 and adividend rate of 6 percent, multiply $50 by 0.06 to find that the preferred share pays a $3annual dividend.