Assuming it sells for $55.00 per share. Its effective annual (not nominal) rate of return is 7.47%.
Using this formula
Effective annual rate of return=[1+(Preferred quarterly dividend+Preferred stock price]^Periods per year-1
Where:
Periods per year =4
Preferred quarterly dividend=$1.00
Preferred stock price=$55.00
Let plug in the formula
Effective annual rate of return = [1+ ($1.00/$55.00)]^4 - 1
Effective annual rate of return=(1+0.018181818)^4-1
Effective annual rate of return=(1.018181818)^4-1
Effective annual rate of return =1.0747-1
Effective annual rate of return =0.0747×100
Effective annual rate of return = 7.47%
Therefore the Effective annual rate of return will be 7.47%.
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