Problem:
Ichabod Corp. has outstanding borrowings that include preferred stock. One of these borrowings is (nonconvertible) preferred stock (cumulative) with a par value of $250 and an annual dividend rate of 8.25%. This preferred stock is currently selling for $260 per share.
Requirement:
Question: What is the yield or return on this nonconvertible preferred stock?
Note: Show supporting computations in good form.