Rebello's preferred stock pays a dividend of $1.00 per quarter, and it sells for $55.00 per share. what is its effective annual

To solve for the effective annual rate of return:

Effective annual rate of return = (1 + (quarterly dividend/preferred stock price)) / periods per year) - 1

Quarterly dividend = $1.00

Preferred stock price = $55.00

Periods per year = 4

EFF annual rate of return = (1 + (1.00/55)) / 4-1

EFF annual rate of return = 7.47%