What is preference shares? Explain types of preference shares.
Understand the Problem
The question is asking for an explanation of preference shares, including their meaning and the types of preference shares, specifically cumulative and non-cumulative preference shares.
Answer
Preference shares are stocks with dividends prioritized over common shares. Types: cumulative, non-cumulative, participating, convertible.
Preference shares are a type of company stock with dividends paid before common stock dividends. Types include cumulative, non-cumulative, participating, and convertible.
Answer for screen readers
Preference shares are a type of company stock with dividends paid before common stock dividends. Types include cumulative, non-cumulative, participating, and convertible.
More Information
Preference shares generally have fixed dividends and priority over common shares during asset distribution. They offer various types with distinct features to cater to different investor needs.
Tips
A common mistake is confusing cumulative and non-cumulative shares regarding dividend rights.
Sources
- What Are the Different Types of Preference Shares? - Investopedia - investopedia.com
- Preference Shares: Meaning, Types And Features - nirmalbang.com
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