Diamond Electronics Inc. has a current price of $18.45 per share for i

Diamond Electronics Inc. has a current price of $18.45 per share for its preferred shares that pay an annual dividend of $0.96. What is the current return on the firm’s preferred shares?

A) 5.20%
B) 19.22%
C) 8.74%
D) There is not enough information to answer this question.

ANSWER

A
Explanation: A) r = $0.96/$18.45 = 5.20%.