Homework Answers
Hello Sir/ Mam
YOUR REQUIRED ANSWER IS : the dividend yield on preferred stock is often higher than the yield on bonds.
Yield on a financial instrument depends somewhat on the nature of the instrument and risk involved in it.
Hence, as preferred stock is more risky than corporate bonds, its' yield will be higher than that of corporate bonds.
I hope this solves your doubt.
Feel free to comment if you still have any query or need something else. I'll help asap.
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