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Why might a firm prefer to issue cumulative preferred stock rather than? a ) Corporate investors can receive a tax break on dividends received. b
Why might a firm prefer to issue cumulative preferred stock rather than?
a Corporate investors can receive a tax break on dividends received.
b Dividend payments are tax deductible, interest on debt is not.
c Preferred stock has no voting rights but debt does.
d Preferred dividends provide a tax shield but debt does not.
e If there is no current taxable income, preferred stock dividends are automatically voided.
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