If Dividends in Arrears Are $1,500,000 Preferred Stock Redemption Value

question 17

Multiple Choice

If dividends in arrears are $1,500,000 preferred stock redemption value of 60,000, and 2,400 preferred shares outstanding, what is the book value per share of preferred stock? (Round the final answer to the nearest cent.)

• A) $25.00
• B) $2.50
• C) $250.00
• D) $12.50

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Definitions:

Repay

To pay back or return money that was borrowed from a person, bank, or financial institution.

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected return.

Uncertainty

A situation characterized by the lack of predictability or definite knowledge about an outcome or result.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.