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Which of the following is not true about preferred stock A) 70%

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Which of the following is not true about preferred stock?
     A)     70% of dividends are nontaxable to other corporations which hold preferred stock.
     B)     The after-tax cost is higher than debt with the same yield.
     C)     Dividends are legal obligations of the firm.
     D)     Preferred stocks are often cumulative in respect to dividends.

23. The Jersey Corporation has 70% of its capital structure in the form of equity capital. $150,000 in capital needs to be raised for a project but only $30,000 in funds is available through retained earnings. How much must be raised through common stock to maintain Jersey Corporation's capital structure?
     A)     $105,000
     B)     $75,000
     C)     $120,000
     D)     $21,000

24. Prices of existing bonds move _________ as market interest rates move _________.
     A)     down, down
     B)     up, up
     C)     up, down
     D)     Bond prices don't move as market interest rates move.
Submitted: 7 years ago.
Category: Homework
Expert:  Neo replied 7 years ago.

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