The major advantage that one derives from issuing preferred stock instead of bonds is that:

a Preferred stock is better than bonds in raising capital.

b Preferred stock dividends are flexible. The penalties for not paying a dividend are not severe as that of missing interest payments on bonds.

c Preferred stock dividends are tax-deductible for all the investors.

d Preferred stockholders can vote for the Board of Directors and be an integral part of the direction of the company.