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"?

Question

Quizplus · Accepted Answer

According to the rules that apply to corporate formation, to be qualified preferred stock, the dividend rate on the stock must vary with interest rates, commodity prices, or other similar indices. Therefore, option B, which states that the dividend rate on the stock may not vary with such indices, makes the issue of preferred stock nonqualified. Options A, C, and D are features that may make the issue of preferred stock nonqualified.

In Accordance with the Rules That Apply to Corporate Formation