Question

Which of the following regarding preferred stock is true? the price in the market remains at par if the required rate of return increases, the price decreases if the price decreases, required rate of return has decreased if the required rate of return increases, the price increases?

Answer 1

The appropriate response is the second one. A preferred stock that qualifies the holder for a settled profit, whose installment takes need over that of normal stock profits. In the event that the required rate of return expands, the value diminishes