Shared features of debentures and preference shares

Steps:

• Define debentures as unsecured loans with fixed interest and no ownership; preference shares as equity with priority dividends but no control.
• Assess voting rights: neither typically grants voting rights in company decisions.
• Evaluate fixed rate of return: debentures have fixed interest, but preference shares' dividends can be cumulative yet not guaranteed like debt.
• Determine inclusion in employed capital: both form part of capital employed (equity for shares, long-term debt for debentures) in balance sheet analysis.

Why A is correct:

• It accurately identifies no voting rights and inclusion in capital employed as shared traits, per corporate finance definitions, while correctly excluding fixed return due to differing legal enforceability.

Why the others are wrong:

• B: Incorrectly marks no voting rights as false, ignoring both lack shareholder control.
• C: Wrongly excludes inclusion in capital employed, as both contribute to long-term funding.
• D: Falsely negates all features, overlooking confirmed shared aspects like no voting.

Final answer: A