When you are holding preferred stock that you can exchange for a predetermined number of shares of common stock,you are holding ________ stock.

Question

Quizplus · Accepted Answer

When a preferred stock can be exchanged for a predetermined number of shares of common stock, it is called convertible preferred stock. Choice A (reissued preferred) and B (migratory preferred) are not common terms used in finance. Choice D (class B common) refers to a separate class of common stock and is different from preferred stock. Therefore, the correct answer is C.

When You Are Holding Preferred Stock That You Can Exchange