Question

$difference \: \\ between \\ \: equity \\ \:shares \\ \: and \\ \: preference \\ \: shares \\ \: \\ \\ for \\ \: 6 \\ \: marks$
business class 11 ​

Answer 1

• Equity shares are the ordinary shares of the company representing the part ownership of the shareholder in the company. Preference shares are the shares that carry preferential rights on the matters of payment of dividend and repayment of capital.
• Since in equity market there is high risk therefore, the equity shareholders are the real bearer of the company because they have a residual share in the liquidation of the company. Whereas, in preference shares, the shareholders have a preference with respect to higher claims on earning and the dividend rate is fixed.

Answer 2

Explanation:

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