Which of the following is true of preferred stocks?
A) Preferred stock with a conversion feature allows holders to change each share into a stated number of shares of common stock.
B) Like bonds, preferred stocks are due for payment on a fixed maturity date along with interest.
C) Restrictive covenants of preferred stocks include provisions about listing of stocks on the securities exchange and determining the price of stock.
D) A firm's bond indenture indicates how many authorized preferred shares and bonds it can issue.

Question

Quizplus · Accepted Answer

Preferred stock with a conversion feature allows holders to change each share into a stated number of shares of common stock. This feature provides the holder with the option to convert their preferred stock into common stock, usually at a pre-determined ratio.

Which of the Following Is True of Preferred Stocks