Similarities between preference share capital and debt, Finance Basics

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Similarities between Preference Share Capital and Debt

Similarities between Preference Share Capital and Debt are as follows:

a) Both have fixed returns.

b) Both do not contain voting rights.

c) Both are generally redeemable.

d) Both will amplify the company's gearing ratio

e) Both are external finances

f) Both have superior claims above and over owners.

g) Both may force the company into receivership.

h) There is no growth along with time.

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