Title
Document Type
Blog Post
Publication Date
9-10-2013
Contents
Preferred stock, also called perpetual stock, is considered a type of hybrid security. It has characteristics of debt, the primary of which is a fixed dividend. However, it also has similarities to equity, in that it is equity, so the dividend is not guaranteed. So, it has higher risk than comparable bonds, but less risk (and less upside) than common stock. Moreover, the price of preferred stock is primarily responsive to changes in interest rates (i.e., like a bond). See related article here, Wall Street Journal.
Recommended Citation
Dolvin, Steven D., "Preferred Stock" (2013). All Chapters. 81.
https://digitalcommons.butler.edu/jmdallchapters/81