Preferred stock typically has a par value, and the dividend is often stated as a percentage of par.The par value is also important in the event of liquidation, as the preferred stockholders are generally entitled to receive the par value before anything is given to the common stockholders.

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Quizplus · Accepted Answer

This is true. The par value is important for determining the dividend payment and also plays a role in the distribution of assets during liquidation.

Preferred Stock Typically Has a Par Value, and the Dividend