The dividend paid to a preferred stockholder is $3.50. The price of one preferred stock is $70. What is the cost of the preferred stock?

5%

10%

15%

20%

Question

Boss

Business

19 August, 06:12

The dividend paid to a preferred stockholder is $3.50. The price of one preferred stock is $70. What is the cost of the preferred stock?

5%

10%

15%

20%

+1

Answers (1)

Know the Answer?

Brent Pace · Answer 1

The cost of one preferred stock is calculated by dividing the dividend by the price. In mathematical equation this is expressed as,

C = (D / P) x 100%

where C is the cost, D is the dividend, and P is the price. Substituting the known values,

C = (($3.5) / ($70) x 100%

C = 5%

The answer to this item is the first choice, 5%.

The dividend paid to a preferred stockholder is $3.50. The price of one preferred stock is $70. What is the cost of the preferred stock?5%10%15%20%

The dividend paid to a preferred stockholder is $3.50. The price of one preferred stock is $70. What is the cost of the preferred stock?

5%

10%

15%

20%