The amount of the claim of preferred stockholders in liquidation is normally equal to the market value of the preferred stock.

Question

Quizplus · Accepted Answer

The amount of the claim of preferred stockholders in liquidation is equal to the face value of the preferred stock, not the market value. However, in some cases, the company may choose to redeem the preferred stock at its market value, which would then become the amount of the claim in liquidation.

The Amount of the Claim of Preferred Stockholders in Liquidation