What Is Redeemable & Irredeemable Preference Shares

Redeemable preference shares can be bought back by the company at a set date, while irredeemable shares provide ongoing dividends indefinitely.

Redeemable Vs Irredeemable Preference Shares

Redemption

Redeemable shares can be bought back by the issuer, while irredeemable shares have no option for redemption, providing ongoing dividends indefinitely.

Redeemable Vs Irredeemable Preference Shares

Duration

Redeemable shares have a fixed tenure, whereas irredeemable shares have an indefinite duration, offering investors ongoing income without a set end.

Redeemable Vs Irredeemable Preference Shares

Investor Exit

Redeemable shares offer a defined exit strategy, while irredeemable shares provide no fixed exit option, appealing to long-term investors.

Redeemable Vs Irredeemable Preference Shares

Dividend Policy

Redeemable shares provide fixed dividends until redemption, whereas irredeemable shares offer a continuous dividend stream without a termination date.

Redeemable Vs Irredeemable Preference Shares

Company Flexibility

Redeemable shares allow flexibility in capital structure, while irredeemable shares represent permanent capital unless the company decides otherwise.

Redeemable Vs Irredeemable Preference Shares

Investor Appeal

Redeemable shares are suitable for short to medium-term investments, whereas irredeemable shares attract long-term investors seeking stability.

Redeemable Vs Irredeemable Preference Shares

Risk Profile

Redeemable shares carry relatively lower risk due to the redemption option, while irredeemable shares pose a potentially higher risk due to their perpetual nature.