Which of the Following Is/are Not True

question 10

Multiple Choice

Which of the following is/are not true?

• A)Convertible preferred shares give the holder of preferred shares the right to convert the preferred shares into a specified number of common shares under certain specified conditions.
• B)Changes in the market price of convertible preferred shares will often parallel changes in the market price of common shares because of the conversion option.
• C)Convertible preferred shares provide the security holders with the possibility of capital appreciation by converting the preferred shares into common shares if the market price of the common shares rises sufficiently.
• D)The issuing firm benefits from issuing convertible preferred shares, because these shares carry a lower dividend rate than purchasers otherwise would have required to buy the shares for a given price.
• E)none of the above

---

Definitions:

Resale Restriction

A policy or legal condition that limits the ways in which a product can be resold by purchasers.

Exclusive Dealing

A contractual agreement where one party grants another party the sole rights to buy, sell, or distribute goods or services in a specified market or territory.

Geographical Areas

Specific locations or regions within a broader space, defined by natural or artificial boundaries.

Resale Restriction

Rules or conditions imposed on the resale of a product, often used by manufacturers to control the distribution or price of their products in the secondary market.