The call or redemption price of preferred stock is used to allocate the investee's equity to preferred stockholders.

Question

Quizplus · Accepted Answer

The call or redemption price of preferred stock represents the price at which the issuer of the stock can redeem or call back the shares from the investors. This price is used to determine the value of the preferred stock for the purposes of allocating the investee's equity to the preferred stockholders. Therefore, the statement is true.

The Call or Redemption Price of Preferred Stock Is Used