If Preferred Shares Are Callable, Then

question 46

Multiple Choice

If preferred shares are callable, then:

• A)There cannot be dividends in arrears.
• B)The shareholders can exchange the preferred shares owned for common shares.
• C)The corporation may, at its option, purchase the preferred shares for a specified cash price.
• D)The preferred shareholder can turn the preferred shares in for a specified cash price.

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Definitions:

Recklessly

Acting with disregard for the safety or consequences of one's actions, often leading to potential harm or risk.

Section 12(a)(2)

A provision under the Securities Act of 1933 that provides a remedy for investors who have been sold securities by means of a prospectus or oral communication containing a material misstatement or omission.

Securities Act of 1933

A U.S. federal law enacted to require transparency in financial statements so investors can make informed decisions regarding securities investments; it also introduced regulations to prevent fraud.

Public Distribution

The system of distributing goods and services to the public through government channels, often at subsidized rates.