Preferred stock is like a bond in that

Question

Quizplus · Accepted Answer

Preferred stock is like a bond in that its dividend payments are typically fixed, like the interest payments on a bond. However, unlike a bond, preferred stock does not have a fixed maturity date. Additionally, while the corporation has a legal obligation to pay the preferred stock dividend, it is not considered a debt obligation like a bond. Preferred stock is like a bond in that its dividend payments are typically fixed, like the interest payments on a bond. However, it does not have a fixed maturity date like a bond. Additionally, while its dividend payments are legally required, they are not considered debt and do not typically carry the same level of financial risk as bonds.

Preferred Stock Is Like a Bond in That