Differences between debt and preference share capital, Finance Basics

Assignment Help:

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)

 


Related Discussions:- Differences between debt and preference share capital

Turnover ratios, Turnover Ratios Turnover Ratios/efficiency/asset mana...

Turnover Ratios Turnover Ratios/efficiency/asset management ratio Turnover ratio shows the efficiency along with that the firm utilized the asset or resources at its dispos

Return on equity, Maghrabi Enclosure follows a moderate current asset inves...

Maghrabi Enclosure follows a moderate current asset investment policy, but it is considering whether to shift to a different strategy. The firm''s annual sales are $500,000; its f

What are the tasks of a financial system, What are the tasks of a financial...

What are the tasks of a financial system? Three Tasks of a Financial System are as follows: 1. Decreasing transaction costs 2. Decreasing financial risk 3. Giving liqu

Example of earnings yield valuation, Example of Earnings Yield Valuation ...

Example of Earnings Yield Valuation Estimated maintainable earnings are £240,000 per annum; rate of return required is 25 percent. Calculate the value of the business. V

Financial performance analysis, given profit margin 7%, total asset turnove...

given profit margin 7%, total asset turnover is 1.94, Return on equity is 23.7%, what is the debt equity ratio

Determine what is the current market price of the bond, 1.  A company is tr...

1.  A company is trying to decide which one of two projects it should accept. Both projects have similar start-up costs. Project 1 will generate annual cash flows of $52,000 a year

Who is floor broker, Who is Floor Broker Floor brokers aren't many in n...

Who is Floor Broker Floor brokers aren't many in number. They execute orders for fellow  members  and  receive  a  share  brokerage  commission  charged  by  a commission broke

Development of plastic money in middle asia, Development of Plastic Money i...

Development of Plastic Money in Middle Asia Motive behind the Fast Development of This Finance (Plastic Money) In Middle Asia a) High incidences of fraud via dishonest empl

Debtors or accounts receiver turnover, Debtors or Accounts Receiver Turnove...

Debtors or Accounts Receiver Turnover Formula is as follow: Debtors/accounts receiver turnover  = Annual credit sales/Average debtor The ratio signify the number of ti

Weighted average cost of capital, Below is information provided for tw...

Below is information provided for two companies, A and B.  Assuming a risk-free rate of 2.5%, an effective tax rate of 40%, and a market risk premium of 5.5%, estimate th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd