Convertible preferred stock has all of the following characteristics except:
A.
a lower dividend rate than non-convertible preferred
B.
a dilution of earnings if converted into common stock
C.
a requirement for shareholders to always accept the call price when called
D.
required dividend payments to shareholders before any dividends are paid to holders of common stock
The Answer Is:
C
This question includes an explanation.
Explanation:
a requirement for shareholders to always accept the call price when called. All of the other statements are true “except” this one. Convertible preferred shareholders have a n opportunity to convert to common stock. There is no forced call price.
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