Preferred stock of financially strong firms sometimes sells at lower yields than the bonds of those firms.

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Preferred stock of financially strong firms sometimes sells at lower yields than the bonds of those firms. For weaker firms, the preferred stock has a higher yield. What might explain this pattern?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 30, 2016 09:25 AM

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Preferred stock of financially strong firms sometimes sells at lower yields than the bonds of those firms.

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In general the fact that preferred stock has lower pr...View the full answer

Fundamentals of Corporate Finance

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