Minty Manufacturing is going to issue additional shares of stock to pay off debt. Minty has stable cash flows and pays no income tax. When will stock price decrease based on this transaction?

Group of answer choices

When new shares of stock are issued

When cash is used to pay off debt

When higher taxes are paid in the future

When the equity issuance/debt reduction is announced

Barring other market imperfections, it is not clear that price will decrease

What is one reason why preferred shareholders typically have lower required return than common stockholders?

Group of answer choices

Preferred stock offers promised dividends

Preferred stock includes voting rights

Preferred stock has higher potential earnings

Preferred stock involves no risk