Definition :

< Preference shares have preferential rights over

the dividend and repayment of capital in the event
of winding up of the company. Preference
shareholders are entitled to receive fixed rate of
dividend.
.cumulative preference share capital
2.non cumulative preference share capital
3.participative preference share capital
4.non participative preference share capital
Return on investment: PreIerence shares are given preIerence to get a
return on investment i.e. dividend. they are paid dividend Iirst out oI the
proIits made by a company.
Return oI capital: These shareholders are paid their capital Iirst in case
oI winding up oI the company.
Fixed dividend: PreIerence shares have a Iixed rate oI dividend and that
is the reason they are called Iixed income securities. Whether the
company has low or high proIits, they are entitled only to a Iixed rate oI
dividend.
Non-participation in prosperity: On account oI Iixed dividends, these
shares do not have any change to share in the prosperity oI the
company's business. (except in case oI participating preIerence shares.)
Non-participation in management: PreIerence shareholders do not
participate in the management oI the company's aIIairs.
Preference share
preference share holders are
not owners of the company
and do not enjoy any voting
right.
2Preference Shares have a
finite tenure and carry a fixed
rate of dividend.
Equity share
Equity Shares has voting right
& they are the real owners of
company.
2equity shares is payable rest of
the dividend payable after
preference share holders.