A characteristic of preferred stock that gives the issuer of the stock the right to buy the stock back from the owner at a fixed price is known as

Question

Quizplus · Accepted Answer

The characteristic described in the question is known as a "call option," which allows the issuer to purchase the preferred stock from the owner at a fixed price, usually after a specified date. This feature is referred to as the stock being "callable." Therefore, the correct answer is E. Participating, cumulative, convertible, and liquidating preference are all other characteristics of preferred stock but are not related to the specific feature described in the question.

A Characteristic of Preferred Stock That Gives the Issuer of the Stock