Some preferred stock is considered a liability for accounting purposes, whereas other preferred stock is considered equity.

Name: Some preferred stock is considered a liability for accounting purposes, whereas other preferred stock is considered equity.
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Preferred stock can be classified as a liability if it has a mandatory redemption feature or fixed dividend payments, while it is considered equity if it lacks these features and behaves more like common stock.

Some Preferred Stock Is Considered a Liability for Accounting Purposes