Preferred Stock Is NOT Similar to Debt Because

question 149

Multiple Choice

Preferred stock is NOT similar to debt because:

• A)preferred dividends are not tax-deductible whereas interest expense is tax-deductible.
• B)preferred dividends do not have to be paid whereas interest expense must be paid.
• C)preferred stock does not have a maturity date whereas debt usually has a maturity date.
• D)all of the above.

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