John Buys a Particular Issue of Stock That Carries a Stated

question 12

Multiple Choice

John buys a particular issue of stock that carries a stated dividend rate of 8 percent per year; that if this dividend is not paid during a particular year,it will not be paid in a subsequent year before common stock dividends are paid; that John can exchange the stock for common stock in the future,at a specified exchange price; and that if the corporation wants to,it may buy the stock back from John at $50 per share.This stock is best described as:

• A) noncumulative,convertible,redeemable preferred
• B) cumulative,convertible,participating preferred
• C) noncumulative,redeemable,participating preferred
• D) cumulative,redeemable,participating preferred
• E) common

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Definitions:

Equal Pay Act

A U.S. law aimed at abolishing wage disparity based on sex by ensuring equal pay for equal work performed by men and women.

Discriminate

To discriminate means to unjustly treat people differently, especially on the grounds of race, age, sex, or disability.

Substantially Equal Work

Work that is essentially the same in terms of skill, effort, and responsibility, and performed under similar working conditions, requiring equal pay.

Religion

A system of beliefs, values, rituals, and worship associated with the veneration of a higher power, supernatural forces, or deities.