If a $100 Par Value Preferred Stock Pays an Annual

question 19

Multiple Choice

If a $100 par value preferred stock pays an annual dividend of $5 and comparable yields are 10 percent, the price of this preferred stock will be

• A)$100
• B)$75
• C)$50
• D)$25

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Definitions:

Inspection Cost

The expenses associated with the activity of ensuring that a product or service meets specified standards of quality.

Least-squares Regression

A statistical method used to determine a line of best fit by minimizing the sum of the squares of the differences between observed and predicted values.

Mixed Cost

Costs that have both fixed and variable components and change in total with the level of activity, but not proportionately.

Machine-hour

A metric that quantifies the number of hours a machine is utilized to manufacture products during a specified timeframe.