Lesson Plan

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Lesson Plan
Grade: Date: 25/02/2026
Subject: Accounting
Lesson Topic: understand and distinguish between share capital (preference shares and ordinary shares) and loan capital (debentures)
Learning Objective/s:
  • Describe the key features of preference shares and ordinary shares.
  • Explain how debentures function as loan capital and their obligations.
  • Compare the rights, risks and priority of share capital versus loan capital.
  • Calculate the annual financing cost of a mixed capital structure.
  • Apply the hierarchy of claims to determine distribution on liquidation.
Materials Needed:
  • Projector and screen
  • Whiteboard and markers
  • Printed handout with comparison tables and example problem
  • Calculator or spreadsheet software
  • Worksheets for individual practice
  • Sticky notes for exit ticket
 Introduction:
Begin with a quick poll asking students which type of company financing they think is riskier – borrowing money or issuing shares. Link this to prior learning on equity vs. debt from earlier units. Explain that today they will be able to distinguish share capital (preference and ordinary) from loan capital (debentures) and identify the associated rights and costs.
Lesson Structure:
  1. Do‑now (5’) – Students list advantages/disadvantages of equity and debt from memory; share responses.
  2. Mini‑lecture (10’) – Define share capital and loan capital, introduce preference vs. ordinary shares; show comparison table.
  3. Guided practice (12’) – Work through the illustrative example; calculate preference dividend and debenture interest together.
  4. Group activity (10’) – Teams fill a worksheet comparing rights, voting, priority, convertibility of the three instruments.
  5. Concept check (8’) – Quick quiz via Kahoot or show of hands on key distinctions.
  6. Consolidation (5’) – Teacher summarises hierarchy of claims using a diagram; students annotate their own copies.
  7. Exit ticket (5’) – Write one sentence stating the main difference between debentures and preference shares.
Conclusion:
Summarise that share capital gives ownership while loan capital creates a creditor relationship, and that debentures rank highest in the claim hierarchy. Ask a few students to restate the hierarchy in their own words as the exit ticket. For homework, assign a short problem requiring calculation of financing costs for a new capital mix.