payment of dividend and repayment of capital. The rate of dividend on
equity shares is not fixed. It fluctuates, as it depends on the profits
made by a company. They have normal voting rights.
Preference shares are those shares which enjoy preference as regards
payment of dividend and repayment of capital.
Preference shareholders do not have normal voting rights.
Many investors view preferred stock as more closely related to fixed income
because the divided yield is typically higher and more stable than on common stock.
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as "preferred shares".
Equity refers to common stock. A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders have been paid in full.
Equity Shares:
Shares who do not enjoy any preference as regards payment of dividend and repayment of capital.
This share holder have right to vote And Equity share holders are owners of the company.
Risk about losing money is more..
Preference Shares:
Shares which enjoy preference as regards payment of dividend and repayment of capital.
This share holder have no right to vote And Equity share holders are Creditors of the company.
Risk about losing money is less than equity share holders.
