Multiple Choice
Which of the following is not true about preferred stock?
A) 100% of dividends are nontaxable to other corporations which hold preferred stock.
B) The aftertax cost is higher than debt with the same yield.
C) Dividends are legal obligations of the firm.
D) Preferred stocks are often cumulative in respect to dividends.
Correct Answer:
Verified
Correct Answer:
Verified
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