CFA Practice Question

CFA Practice Question

Which of the following is incorrect? An analyst wishes to calculate the net worth of a company that has preferred shares outstanding. She should:
A. subtract the par value of the preferred.
B. subtract cumulative dividends that may be in arrears.
C. subtract the liquidating value of the preferred.
Explanation: Par value is somewhat meaningless. What matters is how much the preferreds have to be paid.

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