Because U. S. corporations are allowed to exclude from taxable income 70% of the dividends they receive from other U. S. corporations, it is sometimes suggested by tax planners that they should invest in dividend paying common or preferred stock. Is it tax advantageous for a U. S. corporation to buy dividend paying stock? Is it tax advantageous for a U. S. corporation to buy adjustable rate preferred stock (short term dividend­ paying preferred stock, with a dividend yield that floats in direct proportion to short term treasury yields) instead of dividend paying stock? Is it tax advantageous for a corporation to issue the preferred stock? Canadian firms can exclude 100% of the dividends they receive from other Canadian corporations. Is it tax advantageous for Canadian companies to buy common stock in other Canadian corporations?