An 8 percent stock with a market price of $110 per share and a $100 par value pays a cash dividend of___.
(Need help with steps on how to work this out)
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An 8 percent stock with a market price of $110 per share and a $100 par value pays a cash dividend of___.
(Need help with steps on how to work this out)
"8% stock" sometimes means that the stock is currently paying a dividend that's 8% of the current market price, or
Div = 110 x 0.08
However, especially concerning preferred stock, that same phrase could mean that it pays a dividend equal to 8% of its par.
You'll have to consult your textbook (or whatever background material you have, from which the question comes) to see which version of the terminology applies.
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