A tax-paying corporation would prefer to invest short-term money in:

Question

Quizplus · Accepted Answer

A tax-paying corporation would prefer to invest short-term money in floating-rate preferred stock as it offers a fixed income stream and the dividends are usually eligible for the dividend received deduction. Unlike common stock, preferred stocks pay a fixed dividend, making it a more reliable income stream. Long-term bonds may have higher yields, but they are subject to interest rate risks, which makes them a less attractive investment option for short-term funds. Warrants are a type of option that gives the holder the right to buy or sell a security, but they are not a reliable short-term investment option.

A Tax-Paying Corporation Would Prefer to Invest Short-Term Money In