Why might an investor choose convertible preferred stock?

1. AIt can be converted into bonds.
2. BIt can be exchanged for common stock if the company’s value increases.✓ Correct answer
3. CIt always pays a higher dividend than nonconvertible preferred.
4. DIt guarantees voting rights.

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• Which statement about dividends is correct?
• Common stockholders have which of the following rights?
• Compared to preferred stockholders, common stockholders:
• Callable preferred stock exposes investors to which specific risk?