To the corporate investor, preferred stock offers which of the following advantages?

Question

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Preferred stock offers the advantage of 70% of preferred dividends being tax-exempt and having a higher yield than debt, all else equal before taxes. Option A is incorrect because debt typically has a higher yield than preferred stock. Option B is incorrect because only municipal bond dividends are tax-exempt to the extent of 30%. Option C is incorrect because there is no provision for 70% of preferred dividends being tax-exempt.

To the Corporate Investor, Preferred Stock Offers Which of the Following