XYZ Corp 8% preferred stock with a par value of $100 and a market price of $150 will pay an annual dividend this year of $12 per share.

Name: XYZ Corp 8% preferred stock with a par value of $100 and a market price of $150 will pay an annual dividend this year of $12 per share.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The annual dividend for preferred stock is calculated based on the par value, not the market price. Therefore, the dividend is 8% of $100, which is $8 per share, not $12.

XYZ Corp 8% Preferred Stock with a Par Value of $100