Which of the following is the amount guaranteed to preferred shareholders in the event the company goes out of business?

Question

Quizplus · Accepted Answer

Preferred shareholders are guaranteed a return of their investment at the liquidation value if the company goes out of business. Liquidation value is usually higher than the book value of the shares and is calculated according to the terms of the preferred stock issue. Market value and amortized value are not relevant in the context of liquidation preferences.

Which of the Following Is the Amount Guaranteed to Preferred