The preferred dividend is generally stated as a percentage of the preferred stock's _____.

Question

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Preferred dividends are typically stated as a percentage of the preferred stock's par value. This is because the par value represents the initial investment that the investor made when purchasing the stock. The dividend rate is usually fixed when the stock is issued and cannot be changed without the consent of the shareholders. The other options listed (market value per share, earnings per share, call premium per share, sinking fund) are not relevant to the calculation of the preferred dividend.

The Preferred Dividend Is Generally Stated as a Percentage of the Preferred