Why Corporations Supply Preference Shares Companies that offer preferred shares instead of issuing bonds can accomplish a lower debt-to-equity ratio. That allows them to gain significantly more future financing from new investors. A company's debt-to-equity ratio is one of the most common metrics used to analyze the financial stability of a business. The lower this number is, the more attractive the company looks to investors. Additionally, bond issues can be a red flag for potential buyers. The strict schedule of repayments for debt obligations must be maintained, regardless of the company's financial circumstances. Preferred stocks do not follow the same guidelines of debt repayment because they are equity issues. Investopedia

Preferrred shares can act as poison pills in the event of Hostile Take over