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The customer will have 500 shares at $90 per share
What is Preferred stock?
A component of share capital known as preferred stock is often regarded as a hybrid instrument since it might have any combination of characteristics that common stock does not, including characteristics of both an equity and a debt instrument. A form of stock known as preferred stock is given specific privileges that set it apart from common stock. Preferred stock, in particular, frequently offers bigger dividend payouts and a greater claim to assets in the case of a liquidation.
The primary distinction between preferred and common stock is that common stock grants stockholders voting rights, whilst preferred stock does not. Preferred shareholders receive dividend payments prior to common shareholders since they have priority over the company's income.
Preferred have a predetermined par value when they are first issued, and they typically pay dividends at a defined rate based on a percentage of that par value. Preferred shares' market value is susceptible to changes in interest rates, just like bonds, which also have fixed payments. The preferred shares' value decreases when interest rates climb.
Hence, The customer will have 500 shares at $90 per share.
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