Callable preferred stock is advantageous to the issuer because it allows the company to:
A) call in the stock at less than par value and capture the difference as income.
B) take advantage of high interest rates.
C) issue fixed-rate securities at a yield lower than usual.
D) replace a high, fixed-rate issue with a lower issue after the call date.
Answer: D) replace a high, fixed-rate issue with a lower issue after the call date.