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:

Parol Evidence Rule

A legal principle stating that oral agreements or statements made prior to or at the time of a written contract cannot contradict the terms of the written contract.

Merchant

An individual or company engaged in the business of selling goods or services.

UCC Article 2

Part of the Uniform Commercial Code that governs the sale of goods in the United States.

Camping Store

A retail establishment that specializes in selling equipment and supplies for camping.