The Nature of Equity Capital

• Equity vs. Debt: Key Comparisons

CHARACTERISTIC EQUITY DEBT

Ownership Rights Voting Rights Voting rights in Always default only

Claims on Income/Assets Subordinate Senior to Equity

to Debt

Maturity None Stated

Tax treatment No Deductions Interest on Dividends Payments areTax- Paid Deductible

13-2

• 1994, HarperCollins Publishers

Copyright

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