What is preferred stock

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Question - All finance classes tend to have lots of discussions around the concept of equity capital. Equity, as you know, represents ownership of the firm and all of the advantages/disadvantages ownership entails. There is, however, another form of capital that business professors do not discuss much. That capital is called Preferred Stock. With that in mind, please answer the following questions:

1) What is Preferred Stock?

2) What rights do Preferred shareholders have vs. Common shareholders?

3) In a bankruptcy proceeding, please list the priorty of claims of Common Shareholders, Bondholders and Preferred Shareholders.  Please list highest to lowest claim.

4) From an accounting viewpoint, is Preferred stock closer to Debt or Equity?

5) From a finance viewpoint, is Preferred stock closer to Debt or Equity?

Reference no: EM133027141

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