Preferred stock may exist because:

Select one:

a. preferred dividends reduce the taxable income of the firm.

b. corporations get a tax exemption on preferred dividends paid.

c. if preferred dividends are non-cumulative, then preferred dividends not paid in a particular year will be carried

forward to the next year.

d. an advantage exists for preferred shareholders: they can force the company into bankruptcy because of unpaid

dividends.

e. corporations get a tax exemption on preferred dividends received.