Floating-rate preferred stock offers competitive rates of return with traditional money- market instruments but:

Question

Quizplus · Accepted Answer

Floating-rate preferred stock still provides the corporate investor with the tax exclusion on dividend income, which makes it a competitive option with traditional money-market instruments. The other options (A, C, and D) are incorrect: floating-rate preferred stock is rated by credit rating agencies, has a variable rate of dividend income, and may not have a highly competitive trading market.

Floating-Rate Preferred Stock Offers Competitive Rates of Return with Traditional