Gladstone company issues 116,000 shares of preferred stock for $40 a share. The stock has fixed annual dividend rate of 6% and a par value of $7 per share. If sufficient dividends are declared, preferred stockholders can anticipate receiving dividends of:
A. $48,720 each year.
B. $7 per share.
C. 6% of net income each year.
D. $278,400 each year.
Answer: A
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