Differences between Debt and Preference Share Capital
Differences between Debt and Preference Share Capital are given below:
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DEBT
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PREFERENCE SHARE CAPITAL
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a)
b)
c)
d)
e)
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Interest is tax allowable
Interest is a legal obligation
Debt finance is always secured
Debt finance is a pre-conditional
Has a superior claim
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a)
b)
c)
d)
e)
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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)
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