Preferred stock can best be characterized as: Equity Debt Retained Earnings A security that pays a...
Preferred stock can best be characterized as:
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Equity |
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Debt |
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Retained Earnings |
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A security that pays a fixed dividend like debt, but is subject to non payment like equity. A preferred shareholder cannot force a firm into bankruptcy if the firm fails to pay the dividend. |
Homework Answers
Preferred stock:
It pays a fixed dividend like debt (higher preference over common share holder) but is subject to non payment like equity.
It also behave like equity as shareholder cannot force a firm into bankruptcy if the firm fails to pay the dividend.
Hence, the last option is correct.
Kindly do inform me in case you have any queries.
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Preferred stock can best be characterized as:
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