Letter stock

Question

Letter stock

Quizplus · Accepted Answer

Letter stock refers to a type of stock that gives the holder certain privileges, such as voting rights or higher dividend payouts, but may also come with restrictions on transferability or resale. In the United States, letter stock is allowed but is subject to certain regulations. Specifically, if letter stock represents less than 10% of a company's outstanding shares and has been held for at least two years, it may be sold without registration with the Securities and Exchange Commission (SEC). Therefore, choice D is correct as it accurately states that letter stock could be sold two years after purchase if it is a small percentage of outstanding shares.

Letter Stock