Asked by Angela Fuquay on Jul 25, 2024
Verified
Preferred stock has a stated liquidation value.
Stated Liquidation Value
The predetermined amount per share that shareholders are guaranteed to receive in the event of the company's liquidation as specified in the corporate charter or bond covenant.
Preferred Stock
A class of ownership in a corporation with a fixed dividend that must be paid out before dividends to common stockholders, and with generally no voting rights.
- Understand the particulars and effects of preferred stock, involving cumulative dividends, entitlements upon liquidation, and the capability for callability.
Verified Answer
SS
Sikander SinghJul 27, 2024
Final Answer :
True
Explanation :
Preferred stock typically has a stated liquidation value, which is the amount paid to preferred shareholders from the company's assets before any distribution to common shareholders in the event of liquidation.
Learning Objectives
- Understand the particulars and effects of preferred stock, involving cumulative dividends, entitlements upon liquidation, and the capability for callability.