A Share of Preferred Stock Pays a $2

question 163

True/False

A share of preferred stock pays a $2.00 quarterly dividend. Comparable investments should earn 8% compounded quarterly. The preferred should sell for $100.

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Definitions:

Treasury Shares

Shares that were issued and then repurchased by the issuer, reducing the quantity of outstanding stock.

Outstanding Shares

The total number of shares of a company's stock currently held by all its shareholders, including share blocks and restricted shares.

Issued Shares

The total number of shares that have been sold to and are held by shareholders.

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares plus any amount paid in excess.