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## Types of Preference Shares The preference shares can be broadly divided into four groups: - **Cumulative and Redeemable** - **Non-Cumulative and Irredeemable** - **Participating and Non-Participating** - **Convertible and Non-Convertible** ### Participating and Non-Participating Preference Sha...

## Types of Preference Shares The preference shares can be broadly divided into four groups: - **Cumulative and Redeemable** - **Non-Cumulative and Irredeemable** - **Participating and Non-Participating** - **Convertible and Non-Convertible** ### Participating and Non-Participating Preference Shares: * **Participating** preference shareholders have the right to participate in the surplus profits of the company, whereas **non-participating** shareholders do not have this right. ### Cumulative and Non-Cumulative Preference Shares: * **Cumulative** preference shares accumulate unpaid dividends. If a dividend is not paid one or more years due to poor performance, the accumulated dividend is paid when the company performs well. This accumulated dividend is paid before any payment of dividends to equity shareholders. * **Non-cumulative** preference shares do not accumulate unpaid dividends. If a dividend is not paid in one year due to poor performance, the shareholder forfeits the right to get the unpaid dividend in subsequent years. ### Redeemable and Irredeemable Preference Shares: * **Redeemable** preference shares are repaid after a certain period. These shares carry less risk as compared to irredeemable preference shares.