If a share of cumulative preferred stock has a call price of $95 and has had four years of dividends of $5 each, what is the book value of that share of stock?
A)$95
B)$100
C)$115
D)$105
E)$110

Question

Quizplus · Accepted Answer

The book value of the cumulative preferred stock is $115: $95 + (4 x $5) = $115.
Key Takeaway: The book value of cumulative preferred price can be determined by the call price plus the cumulative dividends.

If a Share of Cumulative Preferred Stock Has a Call