“You missed a lot in this section, Shmooge. Don’t you remember anything from the previous nine times you took the exam?”
“I guess not.”
Shmooge thought he heard a ghostly sigh before the Figure began speaking.
“Preferred stock (which isn’t really debt—technically it is equity—but it pays a fixed dividend, which is similar to a fixed coupon on a bond), would have to come with conversion rights. That is, it could be converted into common stock at a given price over a given period...
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