Preferred Stock Typically Has a Par Value, and the Dividend

question 20

True/False

Preferred stock typically has a par value, and the dividend is often stated as a percentage of par.The par value is also important in the event of liquidation, as the preferred stockholders are generally entitled to receive the par value before anything is given to the common stockholders.

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Definitions:

Diversified Equity Mutual Fund

A mutual fund that invests in a wide range of equities from various sectors to reduce investment risk.

Canadian Companies

Businesses that are registered, operated or have a significant presence in Canada.

Compounded Quarterly

A method of calculating interest in which the interest is compounded quarterly, being added to the principal amount four times annually.

Annual Rate of Inflation

the percent increase in the price level of goods and services across the economy over the course of a year.