Preference shares

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A form of capital with preferred rights over ordinary shares or common stock.

These rights may be a preferred right to a dividend or to repayment in the event of winding up of the business.

This form of capital has some characteristics both of debt and of equity. As such it is a form of hybrid instrument.

Preference shares are frequently used by venture capital investors as a medium for their investment.

Also known as 'preferred shares'.

See also