Question

Preferred stock comes in many varieties. ___ preferred stock includes a requirement that past dividends not paid must be paid in future years before any common stock dividends may be paid.  ___ preferred stock includes the ability to collect dividends with the common stock owners after all preferred dividends have been paid. ___ preferred stock may be turned in for common stock under certain conditions. ___ preferred stock, also known as callable preferred stock, comes with the risk that the issuing company may  ___ the shares under certain conditions.

Fill in the blanks with words that would best complete the passage.

Cumulative

repurchase

Transferable

resell

Common

Sellable

Participating

Redeemable

Convertible

Answer 1

Preferred stock comes in many varieties. _Cumulative__ preferred stock includes a requirement that past dividends not paid must be paid in future years before any common stock dividends may be paid. Participating ___ preferred stock includes the ability to collect dividends with the common stock owners after all preferred dividends have been paid. _convertible__ preferred stock may be turned in for common stock under certain conditions. _Redeemable__ preferred stock, also known as callable preferred stock, comes with the risk that the issuing company may  _repurchase__ the shares under certain conditions.