Preference shares are a hybrid form of financing because ______.

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KollegeApply · Accepted Answer

Preference shares are a hybrid form of financing because preference shares have the characteristics of both equity shares and debentures. Explanation: Preference shares are hybrid because they combine equity traits (dividends paid from profits; limited/no voting) with debt traits (fixed-rate dividend and priority in repayment), so they share characteristics of both equity shares and debentures.

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