Trust preferred stock, first issued in 1993, was engineered to be treated as preferred stock for financial statement purposes and as debt for tax purposes (i.e., payments on trust preferred stock are deductible by the issuer). Our analyses exploit the features of trust preferred stock to shed...

This paper examines debt-equity hybrid securities whose existence and popularity appear to be due to their favorable accounting and tax treatment. Marketed under names such as Monthly Income Preferred Securities (MIPS), these securities are treated as equity-like for financial reporting and...

Trust preferred stock, first issued in 1993, was engineered to be treated as preferred stock for financial statement purposes and as debt for tax purposes (i.e., payments on trust preferred stock are deductible by the issuer). Our analyses exploit the features of trust preferred stock to shed...