Need answers

15. Which of the following statements is CORRECT? (1 Point) O Preferred dividends are not generally cumulative O A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation O Corporations cannot buy the preferred stocks of other corporations The preferred stock of a given firm is generally less risky to investors than the same firm's common stock. 16. Which of the following statements is CORRECT? (1 Point) O One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer. Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis) new issues of preferred stock. One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free. 3