alleryStart learning →What does callability of a preferred stock allow the issuing corporation to do?
AVote at holders' meetings
BRedeem it before maturity
CConvert it into debt
DPay dividends in kind
Answer & Solution
Correct answer: B. Redeem it before maturity
A call feature gives the corporation the option to redeem the stock earlier than its maturity.
Keep practising Sources of Finance
Browse all Sources of Finance questions for CA Inter, or explore more Financial Management topics.
Related questions
What is the usual outcome at the end of a finance lease, as in hire purchase?Under operating lease treatment, what happens to leverage ratios?Under the IFRS approach, when is a lease a finance lease?How does capitalising a finance lease affect the balance sheet?Who is typically the legal owner of the asset during a finance lease?Historically, how have many IPOs been priced relative to market demand?In a Dutch auction IPO, what do all successful bidders pay?A greenshoe option usually lets underwriters raise the offering by up to what percentage?