Preferred stock is often seen as a hybrid security as it has characteristics of both debt and
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(a) What is a hybrid security, and how should it be reflected on the balance sheet, income statement, statement of cash flows, and statement of shareholders’ equity?
(b) Describe some reason why an investor might want to purchase a hybrid security and some reasons why a company might want issue a hybrid security and some reasons why a company might want to issue a hybrid security.
(c) What are some characteristics that would make these securities look more like debt? More like equity?
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