What is preference share and equity share

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Preference shares are a type of shares that have fixed dividends and priority over equity shares in terms of payment. Equity shares represent ownership in a company.

Preference shares have fixed dividends that must be paid before any dividends can be paid to equity shareholders.
Preference shareholders have priority over equity shareholders in terms of payment during liquidation of the company.
Equity shares represent ownership in a company and do not have fixed dividends.
Equity shareholders have voting rights in the company and can participate in decision-making processes.
Preference shares are less risky compared to equity shares as they have a fixed rate of return.
Example: If a company issues preference shares with a dividend rate of 5%, preference shareholders will receive 5% of their investment as dividends before any dividends are paid to equity shareholders.

What is preference share and equity share

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