an investor's perspective, a firm's preferred stock is generally considered to be less risky than its common stock but more risky than its bonds However, from a corporate issuer's standpoint, these risk relationships are reversed: Bonds are the most risky for the firm, preferred is next, and common is least risky.

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From an investor's perspective, preferred stock has a fixed dividend and priority over common stock in case of liquidation, making it less risky than common stock but more risky than bonds. For the issuing firm, bonds are the most risky due to the obligation to pay interest, preferred stock is next due to fixed dividends, and common stock is least risky as dividends are not obligatory.

An Investor's Perspective, a Firm's Preferred Stock Is Generally Considered