How is preferred stock similar to bonds

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Reference no: EM13285128

How is preferred stock similar to bonds?

a. Investors can sue the firm if preferred dividend payments are not paid (much like bondholders can sue for non-payment of interest payments).

b. Dividend payments to preferred shareholders (much like bond interest payments to bondholders) are tax deductible.

c. Preferred stockholders receive a dividend payment (much like interest payments to bondholders) that is usually fixed.

d. Preferred stock is not like bonds in any way.

Reference no: EM13285128

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