10. Preferred stock Preferred stock is often called a hybrid security because it has some characteristics that are typical of debt and others that are typical of common equity. The following table lists several characteristics of preferred stock. Determine which of these characteristics are consistent with debt securities and which are consistent with common stock. Characteristic Debt Common stock Most issues pay quarterly dividends. 0 0 Some issues are perpetual, and do not mature. 0 0 1 Consider the case of Blue Hamster Manufacturing: Blue Hamster Manufacturing pays an annual dividend rate of 14.20% on its preferred stock that currently returns 19.03% and has a par value of $100.00 per share. The preferred stock issue does not mature, and computes its annual dividend as the product of its dividend rate and its par value. What is the current market value of Blue Hamster's preferred stock? O $80.59 per share O $65.67 per share O $102.98 per share $74.62 per share Suppose that due to high inflation, interest rates rise and pull the preferred dividend yield to 27.59%. Then the value of Blue Hamster's preferred stock will to . This is because interest rates (and security returns) and security values are