Preferred Stock with a $100 Par Value and a 5

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