Redeemable preference shares, often referred to as redeemable preferred stock or redeemable preferred shares, are a unique class of financial instruments that combine elements of both equity and debt. These shares are typically issued by corporations to raise capital and attract investors. The key characteristic that sets redeemable preference shares apart from ordinary preference shares is their redemption feature.

Redeemable preference shares represent ownership in a company, just like common shares, but they come with certain privileges and characteristics that make them distinct. The term "preference" in the name indicates that holders of these shares have a preferred claim on the company's earnings and assets over common shareholders. This preference usually involves the right to receive fixed dividends before common shareholders, which provides a level of income predictability for investors.

What makes these shares "redeemable" is their specific feature of being repurchased by the issuing company at a predetermined future date or under specific conditions. This redemption can occur at the par or face value of the shares, giving investors the assurance of recouping their initial investment at a specified time. The redemption provision is outlined in the company's articles of association or the terms of the share issue.

Redeemable preference shares serve various purposes for both companies and investors. Companies can use them to attract investment by offering a promise of redemption, which can make these shares more appealing. For investors, they provide a degree of capital preservation and a predictable income stream through dividends.

It's important to note that redeemable preference shares are subject to certain regulatory and accounting rules, and the specific terms of redemption can vary widely from one issuance to another. Investors should carefully review the terms and conditions associated with these shares to fully understand their rights and potential returns. In summary, redeemable preference shares are a financial instrument that blends characteristics of equity and debt, offering investors a preferred claim on dividends and the security of future redemption by the issuing company.

Redeemable preference shares are a type of equity that offers shareholders the option to have their shares repurchased by the issuing company after a specified period or on a set date. These shares carry both equity and debt characteristics.

Key features include:

1. Fixed Dividends: Like regular preference shares, they provide a fixed dividend, which is paid before any dividends to ordinary shareholders.

2. Redemption Option: The issuing company is obligated or has the right to redeem (buy back) these shares at a predetermined price, either after a certain period or when specific conditions are met.

3. No Voting Rights: Redeemable preference shareholders usually don’t have voting rights in the company.

These shares offer companies a flexible way to raise capital while providing investors with steady income and capital return guarantees.