Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:
A)Convertible preferred stock
B)Callable preferred stock
C)Premium stock
D)Cumulative preferred stock
E)Participating preferred stock

Question

Quizplus · Accepted Answer

Callable preferred stock is preferred stock that can be redeemed by the issuing corporation at a predetermined price at its option. This means that the corporation has the right to buy back the stock from the preferred stockholders, usually at a premium price. This gives the corporation flexibility in managing its capital structure and allows it to reduce its debt levels.

Preferred Stock That the Issuing Corporation at Its Option May