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A company has 10,000 shares of 7% preferred stock issued and outstanding. The preferred stock has a par value of $100 per share. This means

A company has 10,000 shares of 7% preferred stock issued and outstanding. The preferred stock has a par value of $100 per share. This means that:

A. If the Board of Directors declares a dividend, the potential dividend will be $7 for each preferred share.

B. The firm is obligated to buy-back the preferred shares at a 7% markup above the par value.

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