Is preference share a debt or equity?

Question

911 viewsMay 7, 2013Accounting

0

Chancellor December 2, 2012 0 Comments

I know that ordinary shares is part of the equity but what about the preference shares? Is it equity or debt?

2 Answers

You are viewing 1 out of 2 answers, click here to view all answers.

score 0 · Answer 1 · 2012-12-02T22:51:42+00:00

Preference shares can be both equity and debt. If the shares are redeemable, then it is debt (something like a bond).If the shares are not redeemable, then the preference shares are part of the equity.