Convertible preferred stock allows the stockholder to exchange shares of preferred stock for common stock at a specified conversion ratio.

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Convertible preferred stock does allow the stockholder to exchange shares of preferred stock for common stock at a specified conversion ratio. This feature is one reason why investors may choose to invest in convertible preferred stock, as it provides the potential for capital appreciation if the common stock price increases.

Convertible Preferred Stock Allows the Stockholder to Exchange Shares of Preferred