Question 3 1 Point Which of the following is NOT true about preferred stock? . 70% of dividends are nontaxable to other corporations that hold preferred stock. B The after-tax cost is higher than debt with the same yield. Dividends are legal obligations of the firm. D Preferred stocks are typically cumulative with respect to dividends. Question 4 1 Point Buggy Whip Manufacturing Company is issuing preferred stock yielding 8%. Selten Corporation is considering buying the stock. Assume that Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 21%. What is the after-tax preferred yield for Selten? Assume the tax rate on dividends is 15%. A 7.22% B 5.33% (C) 7.64% D 8.00%