The preferred stock of Jay's Comics currently sells for Tk. 23.25 per share. The annual dividend of Tk. 1.50 is fixed. Assuming a constant dividend forever, what is the rate of return on this stock ?

The preferred stock of Jay's Comics currently sells for Tk. 23.25 per share. The annual dividend of Tk. 1.50 is fixed. Assuming a constant dividend forever, what is the rate of return on this stock ?

A 3.49 percent

B 6.45 percent

C 8.06 percent

D 8.50 percent

Solution

Correct Answer: Option B