What would be the case for the preffered stock

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A financial advisor for high heat corp. is trying to choose among three investments opportunities: AAA corporate bonds, whihc yield 8.5 percent, state-issue municipal bonds, which yield five percent, and preferred stock from Co & Co, in which HHC owns less than 20 percent, with a dividiend yield of seven percent. the relevant corporate tax rate is 35 percent. which one s the most attractive investment opportunity?

I understand AAA after 35% is 8.5(1-.35) = 5.53%

Municipal bond remains 5% because they are not taxed

But what would be the case for the preffered stock? 

Reference no: EM131990107

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