Differences between debt and preference share capital, Finance Basics

Differences between Debt and Preference Share Capital

Differences between Debt and Preference Share Capital are given below:

 

DEBT

 

PREFERENCE SHARE CAPITAL

a)

b)

c)

d)

e)

 

Interest is tax allowable

Interest is a legal obligation

Debt finance is always secured

Debt finance is a pre-conditional

Has a superior claim

a)

b)

c)

d)

e)

 

Dividends are not tax allowable

Dividends are not a legal obligation

Preference is not secured finance

Is not conditional finance

Has a residue claim (after debt)

 

Posted Date: 1/29/2013 4:43:52 AM | Location : United States







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