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The cost of raising capital with debt is typically less costly for a firm than raising capital with preferred stock. Which one of the following
The cost of raising capital with debt is typically less costly for a firm than raising capital with preferred stock. Which one of the following is one of the reasons for this?
Preferred stocks are more senior than bonds.
Interest is a tax-deductible cost, preferred dividends are not.
Bonds generally have a longer maturity than preferred stocks.
The interest from bonds is compounded more frequently than the dividends from preferred stocks.
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