Question

Alto Company issued 1000 shares of 7% preferred stock with a $100 par value. This means that:

1. The maximum total dividends preferred stockholders have a right to for any given year is $7

2. The maximum total dividends preferred stockholders have a right to for any given year is $70

3. Preferred shareholders have a guaranteed dividend.

4. The maximum total dividends preferred stockholders have a right to for any given year is $7000