Stephen has recently retired and wishes to invest his retirement bonus payment that he has just received. He comes to you with certain proposals as to where he should invest. He mentions debentures secured by a fixed charge, debentures secured by a floating charge, ordinary shares, and preferential shares. Required:

a) Explain to Stephen which option is the most secure and which is the least secure and why.

b) Advise Stephen on the difference between preference and ordinary shares