Corporations are able to issue preferred stock at a slightly lower pre-tax yield than debt.

Name: Corporations are able to issue preferred stock at a slightly lower pre-tax yield than debt.
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Quizplus · Accepted Answer

This is because preferred stock dividends are not tax-deductible, whereas interest paid on debt is tax-deductible. Therefore, corporations can offer a slightly lower pre-tax yield on preferred stock to make it more attractive to investors.

Corporations Are Able to Issue Preferred Stock at a Slightly