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Unformatted text preview: ue is derived from a pool of underlying income‐generating assets such as auto loans or credit card receivables. 1) Is considered a hybrid security 2) Dividends are fixed and known in advance (like debt) 3) Has an infinite life (like equity) 4) Dividends do not have to be paid, but unpaid dividends may have to be made up in future years 5) Preferred stockholders are paid before common stockholders but after bondholders 1) An “equity” security 2) Represents an ownership interest in the company 3) Shareholders have limited liability 4) Shareholders get return from dividends and/or capital gains (increases in the value of the stock) Cash payments made by corporations to stock holders A payment by the corporation in stock rather than cash. Generally does no...
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