Why would a corporation issue retractable preferred share in a private placement rather than a normal debt arrangement?
A)The tax treatment of intercorporate dividends
B)Income minimization
C)Cash flow
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

The tax treatment of intercorporate dividends often makes retractable preferred shares more attractive than normal debt arrangements because dividends received by one corporation from another are often eligible for significant tax advantages compared to interest income from debt.

Why Would a Corporation Issue Retractable Preferred Share in a Private