Final answer:
Preferred stock is a hybrid form of capital stock that resembles both equity and debt and pays a fixed dividend to shareholders.
Step-by-step explanation:
A hybrid form of capital stock that resembles both equity and debt and pays a fixed dividend is called preferred stock.
Preferred stock is a type of stock that has characteristics of both common stock and bonds. It typically pays a fixed dividend to shareholders before any dividends are paid to common stockholders. However, unlike bonds, preferred stock does not have a maturity date.
For example, if a company issues preferred stock with a 5% dividend rate, shareholders will receive a fixed 5% of their investment as dividends each year.