A Company Issued 7% Preference Shares with a $100 Par

Multiple Choice

A company issued 7% preference shares with a $100 par value. This means that:

A) Preference shareholders have a guaranteed dividend.
B) The amount of the potential dividend is $7 per year per preference share.
C) Preference shareholders are entitled to 7% of the annual income.
D) The market price per share will approximate $100 per share.
E) Only 7% of the total paid-in capital can be preference shares.