What is the yield to maturity (YTM) on a share of Six Flags B $1.81 preferred stock if an investor buys the stock at the following market prices? Assume dividends are paid annually.

Answer is given below.

Explanation:

Preferred stock yield = dividend / stock price

a) dividend = $1.81, stock price = $30

Preferred stock yield = $1.81/$30 = 6.033%

b) dividend = $1.81, stock price = $25

Preferred stock yield = $1.81/$25=7.24 %