Which of the following regarding preferred stock is true?
A) If the price decreases, the required rate of return has decreased.
B) If the required rate of return increases, the price decreases.
C) If the required rate of return increases, the price increases.
D) The price in the market remains at par.

Question

Quizplus · Accepted Answer

Preferred stock prices are inversely related to the required rate of return. If the required rate of return increases, the price decreases and vice versa.

Which of the Following Regarding Preferred Stock Is True