Distinguish between equity share capital and preference share capital
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A company can issue two types of shares firstly Equity shares which are also called ordinary shares and the other preference shares.
Preference shareholders have the right to get the dividend before the equity shareholders. They also have a fixed dividend, even in case of loss preference shareholders will be liable for their fixed dividend.
On the other hand equity shareholders have a voting right in major company decisions. They do not have a fixed dividend if the company makes more profits they will get a high dividend and in case of loss they wont get any dividend so there is a risk factor involved.
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