Question: differential between callable and noncallable bonds likely to be constant over time? Why? b. Because the dividend payments on preferred stock are not a tax-deductible

differential between callable and noncallable bonds likely to be constant over time? Why?

b. Because the dividend payments on preferred stock are not a tax-deductible expense, the explicit cost of this form of financing is high. What are some of the offsetting advantages to the issuing firm and to the investor that enable this type of security to be sold?

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