Why is the cost of debt normally lower than the cost of preferred shares?
A) preferred share dividends are tax deductions
B) interest is tax deductible
C) preferred share dividends must be paid before common share dividends
D) common share dividends are not tax deductible
Correct Answer:
Verified
Q29: A firm can issue $1,000 par value
Q32: Most firms are able to use _
Q40: Financial capital does not include:
A) common equity
Q46: In the equation Kj = Rf +
Q48: Retained earnings has a cost associated with
Q54: If the investor desires less risk than
Q84: For many firms, the cheapest and most
Q91: In the equation Kj = a +
Q98: In the equation Kj = Rf +
Q100: The optimal capital structure for firms in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents