Kent owns 150 shares of 7 percent preferred stock that has a face value of $100 a share.Last year he received no dividends.If profits are large enough this year, he should receive as dividends

Question

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Preferred stock typically pays a fixed dividend based on its face value. Kent's preferred stock pays 7% of the $100 face value per share. Therefore, he should receive 7% of $100 per share, which is $7 per share. For 150 shares, this amounts to $1,050 in dividends.

Kent Owns 150 Shares of 7 Percent Preferred Stock That