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Good afternoon Mr Moffat
in June 2019 CBE there is a question for the equity finance
The correct answer was that :Retained earnings are a source of equity finance
But I haven’t got clear why the bellow option isn’t correct
“Equity finance includes both ordinary shares and preference shares”Equity finance is also ordinary shares and preference shares, (at least I thought it is)
But why this is wrong?No, preference shares are not equity shares.
(In financial accounting they are reported in the same way as equity if they are irredeemable. If they are redeemable then they are treated as debt.)
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