Ask Question
2 November, 10:47

Two years ago you bought 100 shares of Big Bubba convertible preferred stock at $25 per share. The preferred stock had an annual dividend of $2.125 per share, and a total of $3.19 in dividends per share have been paid so far. Today the company announced that the stock is redeemable for $26.70 plus accrued and unpaid dividends, for a total of $27.76. Alternatively, holders may convert their shares of preferred stock at a conversion rate of 1.6393 shares of Big Bubba common stock for each share of preferred stock. If the closing price of Big Bubba common stock is $27.50, what is your holding period return?

+2
Answers (1)
  1. 2 November, 11:05
    0
    your holding period return is 93.08%

    Explanation:

    Ending price = $27.50 * 1.6393

    = $45.0808

    Holding period return = ($45.08 - $25 + $3.19) / $25

    = 93.08%.

    Therefore, your holding period return is 93.08%.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Two years ago you bought 100 shares of Big Bubba convertible preferred stock at $25 per share. The preferred stock had an annual dividend ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers