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Preferred Stock is noted as a hybrid security as it has similar fixed payments to that...

Preferred Stock is noted as a hybrid security as it has similar fixed payments to that of debt but is still considered to be a form of equity. My questions surrounds the practical purchase of preferred stock as an investor and the issuance of preferred stock as a company. When is it practical or advantageous to purchase preferred stock as an investor? Furthermore, when is it practical to issue it as a company?

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preferred stocks are always preferred by those investors who are looking for a higher rate of return than bonds so they are not investing into bonds and who are also looking for a higher dividend than common stocks so they are not investing in common stocks.

it is combination of both devt as well as equity.it is good for the risk averse investor who do not want higher risk in their overall portfolio.

It is practical to issue preferred share when the companies having high cash on it's books of accounts and the companies also does not want to dilute its control over this shares so it is not issuing equity shares and the company do not want to get stuck with the problem of the debt so it does not want to get exposed to debt because it have solvency risk associated wity it.

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