Chapter 11, Problem 8DQ

To determine

Preferred stock:

Preferred stock can be defined as an ownership in a company having a comparatively higher claim on its earnings and assets as compared to common stock. Such stocks have a dividend to be paid out prior to dividends being paid to common shareholders.

Common stock:

Common stock can be defined as a security signifying ownership in a company. Common stockholders have voting rights in electing the board of directors of the company and formulating corporate policies.

To compare: The par value and the call price of a share of the preferred stock.