5713-CS, Decided: July 18, 2012) addresses certain fundamental questions about how a target company’s stock should be valued for purposes of statutory appraisal in a merger.

CPA/ABVs may be engaged to value preferred stock (also called preferred shares) to assist with capitalization of a company, bankruptcy reorganizations, a business merger or sale, exchanging preferred shares for debt or other types of equity securities, gift or estate tax planning, or many other reasons.The rating for preferreds is generally lower than for bonds because preferred dividends do not carry the same guarantees as interest payments from bonds and because preferred-stock holders' claims are junior to those of all creditors.In general, preferred stock has preference in dividend payments.Terms of the preferred stock are described in the articles of association.Like bonds, preferred stocks are rated by the major credit-rating companies.