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:

Opportunity Cost

Neglecting the potential profits from various alternatives upon the decision of one.

Coolers

Insulated containers used to keep food and drinks cold.

Radios

Electronic devices that receive and play audio broadcasts over the airwaves.

Trade

The action of buying, selling, or exchanging goods and services between people or countries.