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SIE: Equity Securities
SIE practice questionmediumCallable Preferred Stock

Callable preferred stock gives the issuing company the right to:

  1. AAllow shareholders to demand redemption at market value
  2. BConvert shares to common stock at any time
  3. CGuarantee fixed dividends to shareholders forever
  4. DRepurchase shares at a specified price after a certain date✓ Correct answer
Explanation

Why DRepurchase shares at a specified price after a certain date

Callable preferred allows the issuer to buy back shares at a set price after a call date. Conversion and perpetual guarantees are not features of callable preferred, nor can shareholders force redemption.

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