The preferred stock of Marble Comics pays annual dividends of $2 in perpetuity (starting in one year). If you buy a preferred share for $22.39 and hold it in perpetuity, then what is your annual rate of return? Express your answer as a percentage rounded to 2 places. i. e. 12.3456%equals12.35%.

Annual rate of return =  08.94%

Explanation:

given data

annual Dividend = $2

Price per share of the preferred stock   = $22.39

solution

Annual rate of return from the preferred stock that is express as

Annual rate of return = annual Dividend ÷ Price per share of the preferred stock    ............1

put here value and we get

Annual rate of return =        

Annual rate of return = 0.0894

Annual rate of return =  08.94%