Name:Nikhil Mahesh

Sukheja
Class:M.COM. II Year
Sem: III
Roll no:26
TOPIC:PREFERNCE SHARES
• MEANING
• Preference shares, also known as preferred stock, is an exclusive share
option which enables shareholders to receive dividends announced
by the company before the equity shareholders.
• DEFINITION
• Preference shares, more commonly referred to as preferred stock, are
shares of a company’s stock with dividends that are paid out to
shareholders before common stock dividends are issued. If the
company enters bankruptcy, preferred stockholders are entitled to be
paid from company assets before common stockholders.
• TYPES OF PREFERNCE SHARES
• Cumulative preference share
• Participating preference shares
• Non-cumulative preference shares
• Non-participating preference shares
• Redeemable Preference Shares
• Non-redeemable Preference Shares
• Convertible Preference Shares
• Non-convertible Preference Shares
• CHARACTERISTICS OF
PREFERNCE SHARES
• Preferential dividend option for shareholders.
• Preference shareholders do not have the right to vote.
• Shareholders have a right to claim the assets in case of a wind up of
the company.
• Fixed dividend payout for shareholders, irrespective of profit earned.
• Acts as a source of hybrid financing.
THANK YOU