If a company retires preferred stock, which of the following is TRUE?

Question

Quizplus · Accepted Answer

Retiring preferred stock means that the company is buying back or redeeming the shares. This results in a decrease in total equity because the company is paying out money to buy back the shares, which reduces the amount of equity that shareholders have in the company. It is possible for the company to record a gain or loss on retirement of stock, but this is not always the case. The number of outstanding shares will not change as preferred stock is a separate class of shares from common stock.

If a Company Retires Preferred Stock, Which of the Following