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Redeemable preference shares, are shares bought on behalf of company, and when the company is ready, it buy back the shares and repays shareholders. am I right Mr Moffat?
Are Loan stocks and Bonds one and the same thing?
then what is the difference between SHARES and LOAN STOCKS OR BONDS?
Preference shares are sold by the company. The company pays a fixed dividend and if they are redeemable then the company repays the holders on a future date.
Loan stock, bonds and debentures are different names for the same things.
Ordinary shareholders (equity) own the company, are entitled to the profits, and receive dividends (the amount depends on how well the company is doing).
Bonds are issued to people who have lent money to the company. The lenders receive interest (and eventual repayment), they do not own the company.
Everything needed for the exam is explained in my free lectures.
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