The value of convertible preferred stock as common stock depends on
1) the exercise terms
2) the dividend paid by the preferred
3) the price of the common stock
A)1 and 2
B)1 and 3
C)2 and 3
D)1, 2, and 3

Question

​The value of convertible preferred stock as common stock depends on
1) the exercise terms
2) the dividend paid by the preferred
3) the price of the common stock
A)​1 and 2
B)​1 and 3
C)​2 and 3
D)​1, 2, and 3

Quizplus · Accepted Answer

The value of convertible preferred stock as common stock depends on the exercise terms and the price of the common stock, but not necessarily on the dividend paid by the preferred. Therefore, the correct choice is B, which includes options 1 and 3.

​The Value of Convertible Preferred Stock as Common Stock Depends

The Value of Convertible Preferred Stock as Common Stock Depends