The type of preferred stock that may be exchanged at the stockholder's option for common stock is
A)corporate bond.
B)cumulative preferred stock.
C)participating preferred stock.
D)convertible preferred stock.
E)callable preferred stock.

Question

Quizplus · Accepted Answer

Convertible preferred stock is the type of preferred stock that may be exchanged at the stockholder's option for common stock. It gives the holder the option to convert their preferred shares into a predetermined number of common shares at a specific time. This provides the potential for a higher return on investment if the value of the common stock increases.

The Type of Preferred Stock That May Be Exchanged at the Stockholder's