Question

The cost of preferred stock is different from the cost of _____ because there is no maturity date on which principal must be paid.

Answer 1

Answer:

debt

Explanation:

One of the cheapest source used by organizations to finance their businesses after financing a debt they incurred is preferred stock.

Cost of preferred stock can be defined as the rate or price that a company pays their investors in return for the income generated through the issuance and sales of its stocks.

Generally, the cost of preferred stock is different from the cost of debt because there is no maturity date on which principal must be paid by the company to the investors.