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31 December, 02:21

You bought a share of 7.5 percent preferred stock for $91.60 last year. The market price for your stock is now $89.10. What is your total return to date on this investment?

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  1. 31 December, 04:13
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    5.46%

    Explanation:

    We know,

    Total rate return on an investment = (Current stock price - Previous stock price + Return on preferred stocks) : Previous stock price

    Given,

    Current stock price = $89.10

    Previous stock price = $91.60

    Return on preferred stock par value = $7.50

    Putting the values into the above formula, we can get,

    Total rate return on an investment = ($89.10 - $91.60 + $7.50) : $91.60

    Total rate return on an investment = ($96.60 - $91.60) : $91.60

    Total rate return on an investment = $5 : $91.60

    Total rate return on an investment = 0.05458

    Therefore, return from the investment = 5.46% (rounded to two decimal places)
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