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  3. Study Set
    Financial Management Theory and Practice Study Set 4
  4. Exam
    Exam 20: Hybrid Financing: Preferred Stock, Warrants, and Convertibles
  5. Question
    Unlike Bonds, the Cost of Preferred Stock to the Issuing
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Unlike Bonds, the Cost of Preferred Stock to the Issuing

Question 30

Question 30

True/False

Unlike bonds, the cost of preferred stock to the issuing firm is the same on a before-tax and after-tax basis.This is because dividends on preferred stock are not tax deductible, whereas interest on bonds is deductible.

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