• There will not be a loss of control within the company because the preference shareholders do not have the voting right
• It can be raised for a specific time period at the end of which it can be repaid. Thereafter the company need not pay the preference dividend
• The risk of financing will be less when compared to updating a loan because the preference dividend will be paid only if distributable profits are available.
• The company can collect financing through issue of preference shares because the company can pay an attractive dividend to attract funds in to the company
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