Reference no: EM13973068

Preferred stock may be desirable to issue for which of the following reason(s)? If there is no taxable income, preferred stock does not impose a tax penalty. The failure to pay preferred dividends, cumulative or noncumulative, will not cause bankruptcy. Preferred dividends are not tax deductible and therefore will not provide a tax shield but will reduce net income. Both the failure to pay preferred dividends, cumulative or noncumulative, will not cause bankruptcy; and preferred dividends are not tax deductible and therefore will not provide a tax shield but will reduce net income. Both if there is no taxable income, preferred stock does not impose a tax penalty; and the failure to pay preferred dividends, cumulative or noncumulative, will not cause bankruptcy.