Although preferred stock is legally a form of equity, it is often referred to as a hybrid security:

Name: Although preferred stock is legally a form of equity, it is often referred to as a hybrid security:
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Preferred stock has characteristics of both long-term debt (fixed dividend payments) and equity (voting rights, ownership stake). Therefore, it is considered a hybrid security. In the context of the cost of capital, it is viewed as a third component alongside debt and equity.

Although Preferred Stock Is Legally a Form of Equity, It