Definition of preference share in English English dictionary
Preference shares generally do not confer voting rights To compensate for this, such shares offer other advantages for the owner (minimum dividend, back payment for non-paid dividend, etc )
Preference shares rank before ordinary shares in respect of dividend payments and, usually, capital repayment Dividends on preference shares are at a fixed rate and the shares do not normally carry voting rights unless the dividend is in arrears
Shares which do not embody any voting rights - or only limited voting rights - at the stockholders' meeting (in contrast to the equity share or normal share) Under the provisions of the articles of association of the particular joint-stock company; however they can embody special rights, such as an enhanced position in terms of dividends
A special share that entitles the holder to preferential treatment in the payment of dividends Preference dividends must be paid before ordinary dividends Preference shares therefore carry less risk than ordinary shares
shares which rank ahead of ordinary shares for the purposes of claiming dividend payments or assets of the company Preference shares usually pay a fixed dividend until redemption semi-annually
Preference shares are shares in a company that are owned by people who have the right to receive part of the company's profits before the holders of ordinary shares are paid. They also have the right to have their capital repaid if the company fails and has to close. Compare ordinary shares