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What is preference share?
Preference shares are shares whose dividends are paid out first before ordinary shares dividends. They so called (preference shares) because they have 'preference' over ordinary shares for payment of dividends.
Can equity shares be converted in to preference shares?
i want 2 convert the equity shares of my cmpany into preference shares
What is limitations of preference shares?
One of the limitations to preference shares is that the shareholder does not have a voting right. Preference shares normally pay a fixed dividend where common stocks do not pay a fixed dividend.
What is maximum life of preference shares?
20
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 preference share?
Preference shares are shares whose dividends are paid out first before ordinary shares dividends. They so called (preference shares) because they have 'preference' over ordinary shares for payment of dividends.
Can equity shares be converted in to preference shares?
i want 2 convert the equity shares of my cmpany into preference shares
What is compulsorily convertible preference shares?
it is a preference shares which willbe converted compulsory into equity shares after a stipulated time
What is preference shares?
Lets understand meaning of Preference Share in Layman language. As name suggest preference shares are those kind of shares which has preference in payment of dividend, and price of shares over equity shares. If company earn net profit, then first return to preference shareholders are given at first, and then to equity shareholders.
What are convertible and non convertible preference shares?
in case of non convertible preference shares, the holders are not given the right to convert their shares into equity shares.
What is limitations of preference shares?
One of the limitations to preference shares is that the shareholder does not have a voting right. Preference shares normally pay a fixed dividend where common stocks do not pay a fixed dividend.
How to calculate cost of preference shares?
Kp (cost of pref. share) = Annual dividend of preference shares Market price of the preference stock
Why at all somebody invests in non cumulative preference shares instead of in cumulative preference shares?
The question is not answered
What is meant by preference share?
What will happen to my preference shares If there is a merger?
What are Cumulative and non cumulative preference shares?
Cumulative shares are when the shares are combined and then evenly distributed to the share holders. Non cumulative preference shares are when they go to certain people first.
What is irredeemable preference shares?
Irredeemable preference shares are the types of shares that do not have maturity dates. They have fixed dividends, and the main priorities are paying for capital and those dividends.
What is maximum life of preference shares?
20
