what is the difference between equity shares and preference shares?
Answers
Answer:
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.
Preference shareholders enjoy the benefit of receiving their dividend distribution first; the equity shareholders enjoy voting rights in major company decisions, including mergers or acquisitions.
Priority in payment of dividend over equity shareholders.
To equity shareholders the dividend is paid after the payment of all liabilities.
Rate of dividend is fixed for preference shareholders.
Rate of dividend fluctuates in equity shares.
Preference shares can be converted into equity shares.
Equity shares can never be converted.
Explanation: