Which of the following statements is FALSE?
A)Preferred stock usually has a stated or par value but unlike bonds,this par value is not repaid at maturity because preferred stocks do not have a maturity date.
B)The only time the par value of preferred stock would be paid to the shareholder is if the company ceases operations or retires the preferred stock.
C)Skipped preferred dividends become a liability of the company.
D)Preferred stock cannot be converted into common stock.

Question

Quizplus · Accepted Answer

Preferred stock can be convertible or non-convertible. Convertible preferred stock can be converted into common stock, whereas non-convertible preferred stock cannot be converted into common stock. Therefore, the statement that "preferred stock cannot be converted into common stock" is false.

Which of the Following Statements Is FALSE