SIE practice questionmediumPreferred Stock
Which feature distinguishes callable preferred stock from other preferred stocks?
- AIt grants multiple votes per share
- BShareholders can convert shares into bonds
- CIt always pays a variable dividend
- DIssuer has the right to redeem shares at a set price after a certain date✓ Correct answer
Explanation
Why D — Issuer has the right to redeem shares at a set price after a certain date
Callable preferred can be redeemed by the issuer after a call date. Shareholders cannot convert to bonds, dividends are often fixed, and voting is not typical.
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