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I bought preferred shares of a company. I paid $20 for eachshare and the dividend...

I bought preferred shares of a company. I paid $20 for each share and the dividend is $1.8 per share. From this investment, I want to earn 10%/year. What is the % return from this investment? Did I make a good decision?


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Expert Solution

Solution>

Rate of Return = Dividend / Stock Cost Price

Rate of Return = $1.80/$20

% Rate of Return = 9%

Since you want to earn 10%/year, this is not a good investment as it only earns 9% per year.

jeff jeffy answered 2 years ago
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