Preferred stock is often called a hybrid security because it has some characteristics that are typical of debt and others that are typical of common equity. The following table lists several characteristics of preferred stock. Determine which of these characteristics are consistent with debt securities and which are consistent with common stock. Characteristic Debt Common stock Most issues pay quarterly dividends. Some issues are perpetual, and do not mature.
Preferred stock is often called a hybrid security because it has some characteristics that are typical of debt and others that are typical of common equity. The following table lists several characteristics of preferred stock. Determine which of these characteristics are consistent with debt securities and which are consistent with common stock. Characteristic Debt Common stock Most issues pay quarterly dividends. Some issues are perpetual, and do not mature.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Preferred stock is often called a hybrid security because it has some characteristics that are typical of debt and others that are typical of common
equity. The following table lists several characteristics of preferred stock. Determine which of these characteristics are consistent with debt securities
and which are consistent with common stock.
Characteristic
Debt
Common stock
Most issues pay quarterly dividends.
Some issues are perpetual, and do not mature.
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