Regarding the tax treatment of payments to securities holders, it is true that _______________, while ____________________.

options:

1) interest and preferred stock dividends are tax-deductible; while common stock dividends are not tax-deductible

2) common stock dividends and preferred stock dividends are tax-deductible; while interest is not tax-deductible

3) interest and preferred stock dividends are not tax-deductible; while common stock dividends are tax-deductible

4) common stock dividends and preferred stock dividends are not tax-deductible; while interest is tax-deductible