Series 7 - General Securities Representative Exam
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Which of the following preferred stock features favors the company and not the investor?
Convertible
A
Callable
B
Participating
C
None - all of them favor the investor
D
Explanations
Callable. The call feature only benefits the company. It allows the company to call in (redeem) the preferred shares; usually after a period of time. The company might do this in order to reduce dividend payment expenses or reissue new preferred stock at a lower dividend rate