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JAMB Commerce 2008 Question 20

Question 20

Business Finance

A source of capital that has both elements of debt and equity is a

  1. A.debenture
  2. B.warrant
  3. C.loan
  4. D.share.
Show the answer and explanation

Answer: D (share.)

Explanation

A preference share is part of the owners' capital but earns a fixed dividend like interest on a debt, so it has features of both.