When Shares of Preferred Stock May Be Redeemed by the Corporation

question 103

Multiple Choice

When shares of preferred stock may be redeemed by the corporation at a certain price,the shares are said to be

• A) cumulative.
• B) nonconvertible.
• C) convertible.
• D) callable.

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Definitions:

Market Value Basis

The valuation of assets or securities based on the current market prices as opposed to historical costs or theoretical values.

Coupon Rate

The interest rate stated on a bond when it's issued, which represents the annual interest payment made by the issuer relative to the bond's face value.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, including both interest payments and the gain or loss on the principal, at the current market price.

Balance Sheet

A summary presenting the financial condition of an organization, showing the company's assets, debts, and owner's equity at a certain time.