In accordance with the rules that apply to corporate formation, which one of the following features does not make an issue of preferred stock "nonqualified"?
A)The shareholder can require the corporation to redeem the stock.
B)The dividend rate on the stock may not vary with interest rates, commodity prices, or other similar indices.
C)The corporation is either required to redeem the stock or is likely to exercise a right to redeem the stock.
D)The stock is limited and preferred as to dividends.

Question

Quizplus · Accepted Answer

The feature that makes an issue of preferred stock "nonqualified" is if the dividend rate on the stock may vary with interest rates, commodity prices, or other similar indices. Choices A, C, and D do not make an issue of preferred stock "nonqualified."

In Accordance with the Rules That Apply to Corporate Formation