Preferred stock is a hybrid security because it shares characteristics of both debt and equity securities. However, it is often hard to know how to classify preferred stock when talking about a firm's leverage. Read the following statement about a characteristic of preferred stocks and answer the corresponding question. If a company does not pay its preferred dividends, these dividends accumulate. These unpaid preferred dividends are called arrearages. True or False: The preceding statement accurately describes a characteristic of preferred stocks. O True O False Preferred stock offers the issuing corporation and investors advantages and disadvantages. Which of the following statements describes an advantage for the issuer of preferred stock? O Preferred stocks help prevent the dilution of common equity. Preferred stocks have higher fixed-income payments than bonds