Types of Preferred Stock
Cumulative preferred: dividends in arrears and current year’s dividends must be paid before common dividends can be paid.
Convertible preferred: convertible into a specified number of shares of common.
Redeemable preferred: may be redeemed by investor on or after a certain date at a certain price (usually higher than par value).
SEC requires that it be shown on the BS between Liabilities and Owners’ Equity.