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Valuation of preferred stock Hybrid

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Preferred stock is said to be a hybrid between common stock and a bond, as the dividends must be paid before any dividends are paid to common stockholders.

How then does one approach valuing preferred stock?

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Solution Summary

The answer tells about the concept of valuation of preferred stock

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The Advantages of preferred stock is :
Risk less Leverage advantage
Dividend postponability
Fixed ...

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