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Many firms issue preferred stock that can later be exchanged for ordinary shares. That is a:
ACollection feature
BCustody feature
CClearing feature
DConversion feature
Answer & Solution
Correct answer: D. Conversion feature
1. The switch happens at a preset point.
2. Common stock is received.
3. It is a conversion feature.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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