Difference
between share and preference share
Difference between share
and preference share can be explained in terms of dividend payment, rate of dividend,
and voting rights;
1. Dividend Payment
Preference share are paid
before the ordinary share dividend payment, and therefore these are called preference
shares. Preference share payment is obligatory payment and does not depend on profitability
of the organization.
2. Rate of Dividend
Preference share are paid
at a fixed rate, where the ordinary shares are paid at a rate proposed by the
board of director. It means that preference share payment rate does not change
over the period of time, where ordinary share rate of dividend may fluctuate over
the period of time.
3. Voting Rights
Preference share carry no voting right, where ordinary
share carry the voting right.
