What do corporations issue to raise capital for investment projects, which generally has a stated dividend amount?

Corporations raise capital for investment projects primarily through the issuance of preferred shares. These shares represent an ownership stake in the company but come with specific advantages over common shares. One of the key characteristics of preferred shares is that they generally have a stated dividend amount, which means holders are entitled to receive dividends at a fixed rate before any dividends are paid to common shareholders. This makes preferred shares a more stable income investment compared to common shares, which can have variable dividends depending on the company’s profitability and discretion of the board.

Investment in preferred shares can appeal to investors seeking consistent income, as the specified dividends are often prioritized, providing a measure of financial predictability. In contrast, while common shares can appreciate in value potentially more than preferred shares, they do not guarantee dividends and are subject to greater volatility.

The other options, like bonds, commercial paper, and common shares, serve different financial purposes or have different characteristics. Bonds are a form of debt and involve interest payments rather than dividends, while commercial paper is a short-term debt instrument used primarily for financing short-term liabilities. Common shares, while a way to raise capital, do not have a fixed dividend, reflecting the company’s performance and decisions made by its board of directors. Hence, preferred shares are the