When a company purchases preferred stock at 2% par $100 what value is recorded?
The reason I am asking is I am trying to find out the ROI, and I am not sure which value to use as my initial investment. I think it should be the preffered dividend, which is $2.00 per share, but confirmation on this guess would be nice :)
Thank you!
Comment on rehmanvohra's post
I was referring to the initial investment. The market value in question is $125 per share, but there are 2 numbers involved in finding the ROI, and the second number is either $2.00 or $100.00