Which of the Following Statements Regarding Preferred Share Financing Is

question 1

Multiple Choice

Which of the following statements regarding preferred share financing is false?

• A) Preferred share dividend payments are non-deductible.
• B) There is a special tax on preferred dividends in excess of $500,000 annually, even if the issuing corporation has no taxable income.
• C) Current tax laws simplify the nature of preferred share financing for corporations.
• D) The preferred share issue may be structured so as to enhance the after-tax return of investors.

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