Question

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Explain the Difference between Preference Shares and Equity shares? ​

Answer 1

Answer:

Equity Shares and Preference Shares. Equity shares are also known as Ordinary Shares. ... Preference shares have the right to receive dividend at a fixed rate before any dividend is paid on the equity shares. Further, when the company is wound up, they have a right to return of the capital before that of equity shares

Answer 2

Answer:

Preference shares :-

• The Nominal value is higher.
• There is no control over the management.
• Voting rights are limited.
• The risk is lower.
• It can be convert into Equity shares.
• They are paid in fixed rate.

Equity shares :-

• The Nominal value is generally lower.
• There is control over the management.
• Voting rights are not limited. They enjoy the voting rights.
• The risk is more as compared to Preference shares.
• It cannot be converted.
• It can be vary depending upon the profit & loss.