Preferred stock is a hybrid security because it shares characteristics of both debt and equity secunties. However, it is often hard to know how to classify preferred stock when taiking about a firm's leverage. Read the following statement about a characteristic of preferred stocks and answer the corresponding question. Preferred dividends are usually considered a fixed charge, which makes preferred stock resernble debt. True or False: The preceding statement accurately describes a characteristic of preferred stocks. False True Preferred stock offers the issuing corporation and investors advantages and disadvantages, Which of the following statements describes a disadvantage for the ispuer of preferred stock? The aftet-tax cost of preferred stock is higher than the after-tax cost of debt. Nonconvertibla preferred stock helps prevent the dilution of common equity