An analyst gathers the following information about a company's non-callable, fixed-rate perpetual preferred stock:
- Par value: $50
- Annual dividend rate: 5%
- Current share price: $48
The capitalization rate of the stock is closest to: | Chartered Financial Analyst Level 2 Quiz - LeetQuiz
Chartered Financial Analyst Level 2
Explanation:
Calculation:
Annual dividend = Par value × Dividend rate = $50 × 5% = $2.50