Corporations prefer bonds to preferred stock for financing their operations because

Question

A. preferred stocks require a dividend
B. bond interest rates change with the economy while stock dividends remain constant
C. the after-tax cost of debt is less than the cost of preferred stock
D. none of the above

none of these choices provide a clear reason for corporations perferring bonds to stocks for financing their operations.

I chose D none of the above...
Is this correct?

Answer 1

I answered this already. The answer is C