Bob owns convertible preferred stock in BigCo. Which of the following is a taxable event for Bob?
A. He converts it into common stock
B. Due to a corporate restructuring, he receives additional shares
C. He receives a cash dividend that is less than the amount that the share price declined last quarter
D. Due to a corporate merger, his shares are exchanged for shares in LargerCo
Answer:C
Bob owns convertible preferred stock in BigCo. Which of the following is a taxable event for Bob?
A. He converts it into common stock B. Due to a corporate restructuring, he receives additional shares C. He receives a cash dividend that is less than the amount that the share price declined last quarter D. Due to a corporate merger, his shares are exchanged for shares in LargerCo