preference shares


Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Like common stock, preference shares represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, preference shares pay a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so.
The main benefit to owning preference shares are that the investor has a greater claim on the company's assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock: cumulative preferred stock, non-cumulative preferred stock, participating preferred stock, and convertible preferred stock. also called preferred stock.

Use preference shares in a sentence

You should try and make sure that you are getting your preference shares if this will be your big investment.

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They had a lot of preference shares that everyone liked and they all thought that it was interesting and also really cool.

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If I have a choice between preference shares and common stock, I always purchase the preference shares since I like knowing I have say in the company.

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cumulative dividend prior-charge capital