Question

What is the dividend on an 8 percent preferred stock that currently sells for $45 and has a face value of $50 per share?

Answer 1

The dividend of a stock would always depend on the face value of the share. Therefore the dividend is calculated by:

Dividend = (Face Value) * (Interest rate)

Dividend = $50 per share * 0.08

Dividend = $4 per share                                (ANSWER)