Most preferred stocks are callable preferred stocks,which means that the callable feature may be exercised by
A) the state that issued the corporation's charter.
B) a preferred stockholder.
C) the issuing corporation.
D) either the issuing corporation or a preferred stockholder.

Question

Quizplus · Accepted Answer

The issuing corporation has the right to exercise the callable feature of the preferred stock. Callable preferred stocks give the corporation the right to buy back the stock from the shareholder at a predetermined price after a certain date. This usually happens when interest rates fall, and the corporation wants to issue new preferred stocks at a lower dividend rate. However, in some cases, the preferred stock may also be callable at the request of the shareholder, usually after a certain time period has elapsed.

Most Preferred Stocks Are Callable Preferred Stocks,which Means That the Callable