Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders 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 gives the issuing corporation the option to retire (or call back) the stock by paying a specified amount to the preferred stockholders. Convertible preferred stock can be exchanged for common stock, cumulative preferred stock provides for the accumulation of dividends if they are not paid, participating preferred stock allows for additional dividends to be paid beyond the stated rate, and premium stock is not a recognized type of preferred stock.

Preferred Stock That the Issuing Corporation Has the Option to Retire