Question: On March 3 2002 pursuant to a public offering First
On March 3, 2002, pursuant to a public offering, First All State Trucking Corp. (FAST) issued securities to investors in denominations of $1,000. The interest rate was 7 percent per year payable semiannually, and the maturity date was March 3, 2010. The rights and obligations of the issuer, FAST, and the holders of the securities were set forth in an indenture agreement. Because the securities were not secured by a mortgage or lien on corporate property, Alec believes they are shares of preferred stock. Is Alec correct? Fully explain the type of security involved, and discuss the extent of the holders’ voting rights.
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