Firms that invest in companies' preferred stock may exclude $70\%$ of their preferred dividend income from taxes.

$q,$

True or False: The preceding statement accurately describes a characteristic of preferred stocks.

False

True

Preferred stock offers the issuing corporation and investors advantages and disadvantages. Which of the following statements describes an advantage for the issuer of preferred stock?

$$ Preferred stocks help prevent the dilution of common equity.

$$ Preferred stocks have higher fixed$-$income payments than bonds.