Preferred stock is often sold by companies

Question

Quizplus · Accepted Answer

Preferred stock is often sold by companies wanting to balance their capital structures and/or that have a large amount of debt relative to equity. Preferred stock can provide a stable source of income for investors and does not dilute the ownership of existing shareholders like issuing more common stock would. Additionally, some companies may prefer to issue preferred stock over common stock due to the taxable advantages of preferred dividends over common stock dividends.

Preferred Stock Is Often Sold by Companies