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20-2 You are told that one corporation just issued $100 million of preferred stock and another purchased $100 million of preferred stock as an investment.

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20-2 You are told that one corporation just issued $100 million of preferred stock and another purchased $100 million of preferred stock as an investment. You are also told that one firm has an effective tax rate of 10%, whereas the other is in the 25% tax bracket. Which firm is more likely to have bought the preferred? Explain. Often find that a camnanule hande have a higher vield than its nreferred stock man 2

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