CED's capital structure consists only of common shares on which it does not pay dividends. XUX's capital structure includes common shares on which it does not pay a dividend, and preferred shares with a fixed dividend. Both companies operate in a cyclical industry. How will changes in the business cycle affect the profitability of each company, all else being equal?

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Changes in the business cycle can affect the profitability of companies differently depending on the... View the full answer