First stock is a hyper security because it shares characteristics of both debt and equity securities$.$ However, it is often hard to know how to classify prefer stock when talking about a firm leverage for the issuing company prefer stock is considered less risky than bonds. This is because if the company fails to distribute the fixed dividends to preferred stockholders, it blank forced into bankruptcy before it could straighten out its problem however, if a company continues to pass paying is preferred dividends raring, and capital or debt or equity markets becomes blank