Alto Company issued 7% preferred stock with a $100 par value.This means that:
A)Preferred shareholders have a guaranteed dividend.
B)The amount of the potential dividend is $7 per year per preferred share.
C)Preferred shareholders are entitled to 7% of the annual income.
D)The market price per share will approximate $100 per share.
E)Only 7% of the total paid-in capital can be preferred stock.

Question

Quizplus · Accepted Answer

The 7% preferred stock indicates that the dividend is 7% of the par value, which is $100, resulting in a $7 dividend per share per year.

Alto Company Issued 7% Preferred Stock with a $100 Par