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    Debs_830's Avatar
    Debs_830 Posts: 3, Reputation: 1
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    #1

    Feb 11, 2011, 07:57 AM
    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!
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #2

    Feb 13, 2011, 07:17 AM
    ROI on preferred shares is to be calculated on its market value, if available.
    Debs_830's Avatar
    Debs_830 Posts: 3, Reputation: 1
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    #3

    Feb 14, 2011, 07:33 AM
    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
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #4

    Feb 16, 2011, 01:02 AM
    It would have helped if you had posted the full question. My answer was based on information available.
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