alleryStart learning →How is the dividend on preferred shares usually specified?
AAs a percentage of par value
BAs a share of company profit
CAs twice the common dividend
DAs a multiple of earnings
Answer & Solution
Correct answer: A. As a percentage of par value
Most preferred shares carry a fixed dividend, typically set as a percentage of par value.
Keep practising Bond Valuation
Browse all Bond Valuation questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
The price-yield relation of a bond is described as what?For a discount bond, how does YTM compare with current yield?On a bond sold at a clean quote, what does the buyer pay at settlement?After a coupon is paid, how does a bond's dirty price behave?A 6% par-100 bond pays on 1 Apr and 1 Oct. On 1 Jul clean price is 98.20. Under 30/360 theHow does the term-structure approach discount a bond's cash flows?In the DDM, the dividend growth rate serves as a proxy for what?Which preferred stock carries an embedded option to swap into another security?