What are preference shares? What are their features?

What are preference shares? What are their features?


Preference shares are those shares which are given preferential treatment as compared to equity shares.

Features of Preference Shares:

1) Return on Investment : It is in the form of dividend and rate of dividend is prefixed and pre communicated to the investors.

2) Not Owners : Investors in preference shares are not the owners of the company.

3) Return of Capital : Capital raised by the company by way of preference shares are required to be repaid during the existence of the company.

4) Non participation in management : Preference shareholders do not participate in the affairs of the company.

5) Risk: The risk is more on the part of the company.
What are the various types of preference shares?
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