Products & Their RisksQuestion 4 of 398
Which feature most directly benefits the ISSUER rather than the holder of a preferred stock?
a.Convertible feature
b.Cumulative feature
c.Participating feature
d.Callable feature
Explanation
A callable (redeemable) feature lets the issuer buy back the shares, usually when rates fall, which benefits the issuer at the holder's expense. Convertible, cumulative, and participating features all add value for the holder.
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