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Difference between preference share and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company. 3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders.
What are merits and demerits of preference share?
DefinitionThe capital of a company is divided into number of equal parts known as shares. Preference sharesAs the name suggests, there have been certain preference as compared to other type of shares. These shares are given two preferences. There is a preference for payment of dividend. The second preference for shares is repayment of capital at the remaining of the profits.Feature of preferences shares1. Preference share have been priority over payment of dividend and repayment of capital.2. Preferences shares do not hold voting rights.a. Cumulative preference shares:- these shares have been a right to claim dividend for those years also for which there were no profits.b. Non cumulating preference shares:- the holders of these share have no claim for the arrears of dividend. They are paid a dividend if there are sufficient profits.c. Redeemable preference share:- neither the company can return the share capital nor the shareholder can demand its repayment.d. Irredeemable preference shares:- the shares which cannot be redeemed unless the company is liquidated are known as irredeemable preference shares.Advantages1. Helpful in raising long term capital for a company2. There is no need to mortgage property on these shares.3. Redeemable preference shares have the added advantages of repayment of capital whenever there is surplus in the company.4. Rate of return is guaranteed.Disadvantages1. Permanent burden on the company to pay a fixed rate of dividend before paying anything on the other shares.2. Not advantageous to investors from the point of view of control and management as preferences shares do not carry voting rights.3. Compared to other fixed interest bearing securities such as debentures, usually the cost of raising the preference share capital is higher.By Golak SahuMBA-Finance
What is a dividend calculator used for?
A dividend calculator helps you figure out your returns. You will plug in interest, rate, and the amount, and it will calculate the payments you will receive.
What are the different types of equity share capital?
Types of shares : Shares in the company may be similar i.e they may carry the same rights and liabilities and confer on their holders the same rights, liabilities and duties. There are two types of shares under Indian Company Law :-1.Equity shares means that part of the share capital of the company which are not preference shares.2.Preference Shares means shares which fulfill the following 2 conditions. Therefore, a share which is does not fulfill both these conditions is an equity share.a. It carries Preferential rights in respect of Dividend at fixed amount or at fixed rate i.e. dividend payable is payable on fixed figure or percent and this dividend must paid before the holders of the equity shares can be paid dividend.b. It also carries preferential right in regard to payment of capital on winding up or otherwise. It means the amount paid on preference share must be paid back to preference shareholders before anything in paid to the equity shareholders. In other words, preference share capital has priority both in repayment of dividend as well as capital.In Companies, the words 'Capital' and 'Share Capital' are used interchangeably. The raising of capital by issuing the shares is known as Share Capital. Share Capital is a permanent liability of a company. Memorandum of Association must contain all the features of a company's share capital i.e. amount, its division into shares etc.Types of Share Capital:- Authorised, Issued, Subscribed, etc.Detailed meaning of all here: http://financenmoney.in/what-is-share-capital/
Personal Finance Stocks Dividend Handout?
You Have 1,000 shares of $30 par value preferred stock and 700 shares of common stock. The preferred stock pays an 8.2% guaranteed rate of return. The common stock dividend is 85 cents per share. What is the total dividend of the preferred plus common Stock?
Difference between preference share and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company. 3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders.
What are the advantages of preferred shares?
Preference shares are shares that receive dividends and repayments of capital in prority to ordinary shareholders. The rate of dividends are fixed. The disadvantage is that the rate of dividend will not increase if profits increase.
What are merits and demerits of preference share?
DefinitionThe capital of a company is divided into number of equal parts known as shares. Preference sharesAs the name suggests, there have been certain preference as compared to other type of shares. These shares are given two preferences. There is a preference for payment of dividend. The second preference for shares is repayment of capital at the remaining of the profits.Feature of preferences shares1. Preference share have been priority over payment of dividend and repayment of capital.2. Preferences shares do not hold voting rights.a. Cumulative preference shares:- these shares have been a right to claim dividend for those years also for which there were no profits.b. Non cumulating preference shares:- the holders of these share have no claim for the arrears of dividend. They are paid a dividend if there are sufficient profits.c. Redeemable preference share:- neither the company can return the share capital nor the shareholder can demand its repayment.d. Irredeemable preference shares:- the shares which cannot be redeemed unless the company is liquidated are known as irredeemable preference shares.Advantages1. Helpful in raising long term capital for a company2. There is no need to mortgage property on these shares.3. Redeemable preference shares have the added advantages of repayment of capital whenever there is surplus in the company.4. Rate of return is guaranteed.Disadvantages1. Permanent burden on the company to pay a fixed rate of dividend before paying anything on the other shares.2. Not advantageous to investors from the point of view of control and management as preferences shares do not carry voting rights.3. Compared to other fixed interest bearing securities such as debentures, usually the cost of raising the preference share capital is higher.By Golak SahuMBA-Finance
Difference between debenture and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company. 3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders. Detailed answer here: http://financenmoney.in/types-of-share/
How to calculate prefrred dividend before devidend declared?
Calculation of preferred dividend does not depend upon the dividend declared at the end of the year. Preferred dividend is fixed and is calculated using the fixed percentage of preferred dividend. For example a company has 1000 shares of 6 preferred stock outstanding, each with par value of $100. 6 mentioned before preferred stock is the dividend rate(6%) to be received by preferred shares. Preferred Dividend = No. of preffered shares outstanding x Par value of each share x Dividend rate. = 1000 x 100 x 6%. = $ 6000. Dividend per share = 6000/1000 = $6
When cumulative convertable prefrence share introduced?
Convertible preference share is a share that gives its investors the option to convert his Preference Shares into Ordinary Equity Shares. However, this option can be availed only after a prescribed period. The shareholder gets his dividend at a fixed rate and investors invest in them as fixed income securities.
What is the difference between equity shares with voting rights and equity shares with differential rights?
Equity shares with voting rights are those shares which have right to vote with dividend where as in differential voting right shares , a shareholder sacrifices a some rate of dividend to get additional voting rights. By divya mittal
What are the disadvantages of preference shares?
One disadvantage of preference shares is that they have limited voting rights. Preference shareholders typically have the right to vote only on matters that directly affect their rights, such as changes to the dividend policy or the issuance of additional preference shares. Another disadvantage is that preference shareholders do not have the same potential for capital appreciation as common shareholders. In case of liquidation, common shareholders are paid after all debt holders and preference shareholders are paid, which means preference shareholders may not receive the full value of their investment.
What is a dividend calculator used for?
A dividend calculator helps you figure out your returns. You will plug in interest, rate, and the amount, and it will calculate the payments you will receive.
What are the different types of equity share capital?
Types of shares : Shares in the company may be similar i.e they may carry the same rights and liabilities and confer on their holders the same rights, liabilities and duties. There are two types of shares under Indian Company Law :-1.Equity shares means that part of the share capital of the company which are not preference shares.2.Preference Shares means shares which fulfill the following 2 conditions. Therefore, a share which is does not fulfill both these conditions is an equity share.a. It carries Preferential rights in respect of Dividend at fixed amount or at fixed rate i.e. dividend payable is payable on fixed figure or percent and this dividend must paid before the holders of the equity shares can be paid dividend.b. It also carries preferential right in regard to payment of capital on winding up or otherwise. It means the amount paid on preference share must be paid back to preference shareholders before anything in paid to the equity shareholders. In other words, preference share capital has priority both in repayment of dividend as well as capital.In Companies, the words 'Capital' and 'Share Capital' are used interchangeably. The raising of capital by issuing the shares is known as Share Capital. Share Capital is a permanent liability of a company. Memorandum of Association must contain all the features of a company's share capital i.e. amount, its division into shares etc.Types of Share Capital:- Authorised, Issued, Subscribed, etc.Detailed meaning of all here: http://financenmoney.in/what-is-share-capital/
What are the different types of share capital?
Types of shares : Shares in the company may be similar i.e they may carry the same rights and liabilities and confer on their holders the same rights, liabilities and duties. There are two types of shares under Indian Company Law :-1.Equity shares means that part of the share capital of the company which are not preference shares.2.Preference Shares means shares which fulfill the following 2 conditions. Therefore, a share which is does not fulfill both these conditions is an equity share.a. It carries Preferential rights in respect of Dividend at fixed amount or at fixed rate i.e. dividend payable is payable on fixed figure or percent and this dividend must paid before the holders of the equity shares can be paid dividend.b. It also carries preferential right in regard to payment of capital on winding up or otherwise. It means the amount paid on preference share must be paid back to preference shareholders before anything in paid to the equity shareholders. In other words, preference share capital has priority both in repayment of dividend as well as capital.In Companies, the words 'Capital' and 'Share Capital' are used interchangeably. The raising of capital by issuing the shares is known as Share Capital. Share Capital is a permanent liability of a company. Memorandum of Association must contain all the features of a company's share capital i.e. amount, its division into shares etc.Types of Share Capital:- Authorised, Issued, Subscribed, etc.Detailed meaning of all here: http://financenmoney.in/what-is-share-capital/
Personal Finance Stocks Dividend Handout?
You Have 1,000 shares of $30 par value preferred stock and 700 shares of common stock. The preferred stock pays an 8.2% guaranteed rate of return. The common stock dividend is 85 cents per share. What is the total dividend of the preferred plus common Stock?
