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Profitable companies often prefer to issue debt rather than preferred stock because
A) debt creates less risk for the company.
B) interest payments are fixed but preferred shareholders expect dividends to grow.
C) preferred shares dilute the voting rights of common shareholders but bonds do not.
D) interest on debt is deductible for tax purposes, but preferred dividends are not.
Textbook 

Financial Management: Principles and Applications


Edition: 13th
Authors:
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