Which of the following statements about floating rate preferred stock is true?
A) The dividend rate changes quarterly.
B) The price of the stock fluctuates with the market.
C) The dividend rate is tied to the inflation rate.
D) More than one of the options is true.

Question

Quizplus · Accepted Answer

Floating rate preferred stock has a dividend rate that changes periodically (usually quarterly) based on a benchmark interest rate. This makes the dividend payment more flexible and potentially protects the investor against rising interest rates.

Which of the Following Statements About Floating Rate Preferred Stock