A company issued 8% preferred stock with a $100 par value.This means:
A)Preferred stockholders are entitled to 8% of the annual net income.
B)Only 8% of total contributed capital can be preferred stock.
C)Preferred stockholders are guaranteed a dividend.
D)The potential dividend to preferred stockholders is $8 per share per year.

Question

Quizplus · Accepted Answer

Dividends per share on preferred stock = Par value × Annual dividend rate
= $100 × 0.08 = $8 per share (if declared)

A Company Issued 8% Preferred Stock with a $100 Par