Preference shares: related pages

A bond is a security that pays interest. The majority of bonds have a fixed life at the end of which the principal is returned.

Bonds which can be exchanged for shares on or before maturity.

A security is redeemable is the issuer has a right to re-pay the liability it represents and cancel it.

The stake a businesses owners have in it; assets minus liabilities.

A hybrid security or hybrid instrument is a security that has characteristics of both debt and equity.

The most common form of equity. Shares with equal entitlements to share in profits and to vote.

Securities issued by building societies that pay fixed interest. Often not redeemable.

Preference shares that pay a lump sum at maturity instead but no annual dividends.

The particular combination of debt, equity (shares) and other sources used by a company to finance its long term requirement for capital.

The proposition that the proportion of debt to equity does not affect the total value (debt + equity) of a company.