+1 862 207 3288 1. In what respect is preferred stock similar to bonds, and in what respect is it similar to common stock? 2. Explain the following statement: “Whereas a bond contains a promise to pay interest, common stock provides an expectation but no promise of dividends.”
3. Should preferred stock be classified as debt or equity? Does it matter if the classification is being made by the firm’s (a) management, (b) creditors, or (c) equity investors?
