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Alto Company issued 7% preferred stock with a $100 par value

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

1. 1. The amount of the potential dividend is $7 per year per preferred share.
   2. Preferred shareholders are entitled to 7% of the annual income.
   3. The market price per share will approximate $100 per share.
   4. Only 7% of the total paid-in capital can be preferred stock.