Preferred stock cannot be converted into common stock

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Reference no: EM13834958

Which of the following statements is FALSE?

1. Skipped preferred dividends become a liability of the company

2. Preferred stock cannot be converted into common stock

3. Preferred stock usually has a stated or par value but unlike bonds, this par value is not repaid at maturity because preferred stocks do not have a maturity date

4. The only time the par value of preferred stock would be paid to the shareholder is if the company ceases operations or retires the preferred stock

Reference no: EM13834958

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