Final answer:
Preferred stock can indeed be called back by a company if a call option is included in its terms, allowing the company to repurchase the stock at a specified price after a certain period.
Step-by-step explanation:
Yes, preferred stock can be called back by a company. This is typically referred to as the call feature. Companies issue preferred stock with certain terms and conditions, and one of those terms can be a call option, which gives the company the right to repurchase the stock at a specified call price after a set period. This is often done when interest rates fall, and the company can issue new shares at a lower cost of capital. Investors who own the preferred shares are obliged to sell them back to the company if the company decides to exercise its call option.