Preferred Stock with a $100 Par Value and a 5

question 327

Multiple Choice

Preferred stock with a $100 par value and a 5 percent dividend is currently trading on the market at $90 per share. What is the amount of the dividend the holder is entitled to receive each year on each share?

• A) $90 (i.e., 90 percent of $100)
• B) 5 percent of $90
• C) 5 percent of total corporate profits divided by the number of shares outstanding
• D) $5
• E) None of these

---

Definitions:

Permissive

Permissive refers to a style of parenting or authority where there are few limitations on behavior, leading to more freedom and self-direction for the individual.

Kohlberg's Moral Reasoning

A developmental theory proposing that an individual's ability to judge right from wrong evolves through a series of stages.

Preconventional

A stage in moral development, according to Kohlberg, where moral reasoning is based on rewards and punishments.

Premature

Occurring or done before the usual or proper time; too early.