A violation of preferred stock restrictive covenants usually permits preferred shareholders to

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When a violation of preferred stock restrictive covenants occurs, preferred shareholders usually have the right to force the retirement of the preferred stock at or above its par value. This means that the company must buy back the preferred shares from the shareholders at a price that is at least equal to the face value of the stock. This is a way for the company to rectify the violation of the restrictive covenants and maintain good relations with its preferred shareholders. B, C, and D are not typically options for preferred shareholders in this situation.

A Violation of Preferred Stock Restrictive Covenants Usually Permits Preferred