In a liquidation, each share of 5% preferred stock is generally entitled to a liquidation payment of _____ as long as there are sufficient funds available. The par value of the preferred stock is $100.
A) $1
B) $5
C) $10
D) $50
E) $100

Question

Quizplus · Accepted Answer

In a liquidation, preferred stockholders are entitled to receive the par value of their shares before common stockholders receive anything, assuming there are sufficient funds. Since the par value is given as $100, each share of 5% preferred stock would be entitled to a liquidation payment of $100.

In a Liquidation, Each Share of 5% Preferred Stock Is