A Violation of Preferred Stock Restrictive Covenants Usually Permits Preferred

question 29

Multiple Choice

A violation of preferred stock restrictive covenants usually permits preferred shareholders to

• A) force the retirement of the preferred stock at or above its par value.
• B) force the company to repurchase the shares at a stated amount below par.
• C) force the company into bankruptcy.
• D) sell their shares.

---

Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including income statement, balance sheet, and cash flow statement.

Cash-generating Unit

The smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets or groups of assets.

Average Tax Rate

The proportion of total income that an individual or corporation pays in taxes.

Income

The amount of money received by an individual or business in exchange for labor, services, or investments, typically measured over a specific period of time.