Differences between Equity Finance and Preference
Dissimilarity between Equity Finance and Preference are as follows:
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Ordinary share capital
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Preference share capital
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a)
b)
c)
d)
e)
f)
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Has a residue claim both on assets and profit
Carries voting rights
Reduces the gearing ratio
Variable dividends hence grow over time
Permanent finance
Easily transferable.
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a)
b)
c)
d)
e)
f)
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Has a superior claim
No voting rights
Increases the gearing ratio
Fixed dividends hence no growth
Usually redeemable
Not easily transferable
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