Alto Company issued 7% preferred stock with a $100 par value. This means that:
A. The amount of the potential dividend is $7 per year per preferred share.
B. Preferred shareholders have a guaranteed dividend.
C. The market price per share will approximate $100 per share.
D. Preferred shareholders are entitled to 7% of the annual income.
E. Only 7% of the total paid-in capital can be preferred stock.
Answer: A
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