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Unformatted text preview: Current practice is to list redeemable preferred stock as an item between the liability and equity sections of a balance sheet. The SEC felt, in making this requirement, that redeemable preferred stock has characteristics significantly different from conventional equity securities, and that the related cash flow obligations should be distinguished from permanent capital. The SEC did not, however, go so far as to say that mandatorily redeemable preferred stock should be considered (and classified) as a liability....
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This note was uploaded on 07/10/2011 for the course BUSINESS 450 taught by Professor Bayer during the Spring '11 term at Limestone.
- Spring '11