A company is looking to raise funds through an instrument that provides fixed periodic returns to the investor but does not grant voting rights.…

(c) Preference shares are a hybrid financial instrument. They offer a fixed dividend (like debt), but the capital raised is considered part of the equity of the company. Holders of preference shares: (i) Do not have voting rights in most cases (unlike equity shareholders). (ii) Rank above equity shareholders in case of company liquidation, but below debt holders like debenture holders. (iii) Are repaid after creditors but before equity holders, making them less risky than equity but riskier than debt.