5. Which of the following statements is correct? Preferred stock is normally expected to provide steadier, more reliable income to investors than the a. same firm's common stock. As a result, the expected after-tax yield on the preferred stock is lower b. A major disadvantage of financing with preferred stock is that the preferred stockholders typically have c. If a company has two classes of common stock, Class A and Class B, the stocks may pay different d. One of the advantages of financing with preferred stock is that 70% of the dividends paid out are tax than the after-tax expected return on the common stock. supernormal (i.e. above normal) voting rights. dividends, but the two classes must have the same voting rights deductible to the issuer. A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase? 6. a. The company begins to pay employees monthly rather than weekly b. The company previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity. The company increases its use of trade credit. The company increases its dividend payout ratio. c. d