A higher interest rate (discount rate)would:
A) increase the price of corporate bonds.
B) reduce the price of preferred stock.
C) increase the price of common stock.
D) reduce the cost of dividends.

Question

Quizplus · Accepted Answer

A higher interest rate (discount rate) would make preferred stock less attractive to investors because it has a fixed dividend payment. As a result, the price of preferred stock would decrease.

A Higher Interest Rate (Discount Rate)would