Corporate Instruments (2)
On November - 29 - 2008
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Preferred stock. Preferred stock allows a company to benefit from the intercorporate dividend deduction. Provided a stock is purchased before the ex-dividend date and is held, unhedged, for a minimum of 45 days, the corporate investor can exclude up to 70 percent of dividends received from income.
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Money market mutual funds (MMF). MMFs are large pools of short-term financial instruments, from which shares are sold to investors. One of the greatest benefits of MMFs is that they allow investors to earn money market yields for small individual amounts of investment. MMFs are typically highly liquid and diversified, and can respond quickly to market changes to provide investors with above-average yields.



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