The redemption privilege on preferred shares provides that the preferred shareholders can:
A)Purchase treasury shares any time they become available.
B)Turn in the preferred shares for a specified cash price.
C)Purchase enough shares of any new issue, so that their percentage ownership remains the same.
D)Exchange the preferred shares for common shares.

Question

Quizplus · Accepted Answer

The redemption privilege allows preferred shareholders to sell their shares back to the corporation at a specified price, which is essentially turning in the preferred shares for a specified cash price.

The Redemption Privilege on Preferred Shares Provides That the Preferred