What are Preference Shares?

Preference shares (or preferred shares or preferred stocks) are very different from ordinary shares. They usually carries no voting rights, but have priority over ordinary shares in the payment of dividends.

Preference shares can be further classified into two types: cumulative and non-cumulative. For cumulative preference shares, any dividends that are not settled from previous year will be carried forward to the next period. But for non-cumulative preference shares, any dividends that are not paid previously cannot be carried forward.

* Featured Articles:

Characteristics of Preferred Stock
It has a fixed rate of dividend, which is specified as a percentage of the nominal value. Also, preference dividends must be paid before ordinary dividends...

Types of Preference Shares
Convertible preference shares are corporate fixed-income securities that the stockholders have the option of converting them into a certain number of ordinary shares...

Advantages and Disadvantages of Preferred Stock
The main advantage is that it raises capital for a company without sacrificing the control of company. It is useful for corporate restructuring/reorganization...

Understand Equity Market - Preferred Stock
Participating preferred stock gives the holders the right to receive a specified dividend plus the right to additional earnings based on certain predetermined condition...
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Kelvin Wong Loke Yuen is an experienced writer with a strong background in finance, specializing in the creation of informative and engaging content on topics such as investment strategies, financial ratio analysis, and more. With years of experience in both financial writing and education, Kelvin is adept at translating complex financial concepts into clear, accessible language for a wide range of audiences. Follow him on: LinkedIn.

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