Question

Convertible preferred stock conveys what additional benefit over common stock? Select one: A. Convertible preferred stock has a fixed dividend yield exceeding the return for common stock. B. Unpaid dividends on convertible preferred stock are never paid before common stock dividends. C. Convertible preferred stock has a senior claimant position in bankruptcy. D. Convertible stock can be converted into the company's debt security. E. All of the above

Answer 1

Option C is the correct answer. C. Convertible preferred stock has a senior claimant position in bankruptcy.

Explanation:

The explanation is quite simple, and it comes from the definition of convertibles stocks.

Convertible preferred stock has a senior claimant position in bankruptcy.