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A Call Provision Associated with a Preferred Stock Issue

Question 59

Multiple Choice

A call provision associated with a preferred stock issue


A) Is generally advantageous to investors because it provides increased marketability for the security.
B) Will never influence the market price of the security.
C) Will tend to prevent the market price of the preferred stock from falling below its preset call price.
D) Is likely to be used by the company at a time when investors will have to reinvest at lower interest rates.
E) Is unimportant since preferred stocks never have call features.

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