Corporations that invest surplus funds in floating-rate preferred stock benefit from getting a relatively stable price, which is desirable for liquidity portfolios, and they also benefit from the 50% tax exemption on preferred dividends received.

Question

Quizplus · Accepted Answer

Corporations do benefit from investing in floating-rate preferred stock due to the stable price and tax exemption on preferred dividends received.

Corporations That Invest Surplus Funds in Floating-Rate Preferred Stock Benefit