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10. Differentiate between equity share & preference share.​

Sagot :

Parrain

Answer:

Equity Shares are commonly called Common shares and have both advantages and disadvantages over Preference shares.

  • Equity shareholders are allowed to vote on company issues while preference shareholders can not.
  • Preference shareholders get paid first between the two in the case that the company liquidates from bankruptcy.
  • Preference shareholders get a fixed dividend that has to be paid before equity share dividends are paid.
  • Preference shareholders can convert their shares to Equity shares but equity shareholders do not have the same courtesy.
  • Preference shares can only be sold back to the company while equity shares can be sold to anybody.

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