Discuss How Preferred Shares Have Features of Both Debt and Equity

question 43

Essay

Discuss how preferred shares have features of both debt and equity instruments.

---

Definitions:

TPS

A Transaction Processing System is an information system that gathers, saves, alters, and provides access to an organization's transaction data.

Make-to-order

A production strategy where manufacturing starts only after a customer's order is received, allowing for customization of products but potentially leading to longer lead times.

Make-to-stock

A production strategy where items are manufactured for stock based on demand forecasts, rather than being custom made to order.

Fulfillment

The process of completing an order or obligation, especially in the context of preparing and delivering goods to customers.