Patricia holds stock in Avitrep Drugs, a leading pharmaceutical company. In 2005, Patricia traded her stock for another type of stock that granted her the right to vote and the right to participate in income through dividends. Which class of stock did Patricia own initially?

Question

Quizplus · Accepted Answer

Patricia initially owned convertible stock, which she traded for another type of stock that granted her voting rights and dividend participation, characteristics typical of common stock. Convertible stock allows holders to convert their shares into a different type of stock, usually common stock, under certain conditions.

Patricia Holds Stock in Avitrep Drugs, a Leading Pharmaceutical Company