Difference Point Between Equity Share and Preference Shares

HSC Board – Easy way to learn and memorized – class 12th – S.P – Notes of business finance – Difference between Equity Shares and preference Share , Distinguish between Equity Shares and preference Share –  business finance – Secretarial Practice – Notes,  & Distinguish Between – according to the New Textbook for HSC Board – Difference between, Study material, studies notes, study notes.

Sr.NoDifference pointEquity SharePreference Shares
1.MeaningThese are the ordinary shares which can claim dividend and return of capital only after payment to others.These are the shares which enjoy preference over equity shares in case of dividend and return of capital.
2.Rate of DividendEquity shares are paid dividend at fluctuating rate.preference share holders get dividend at fixed rate.
3.Voting RightsEquity share holders enjoy normal voting rights, through which they participate in the management of the company.They can vote only on those matters which affect their interest directly.
4.Face ValueEquity shares are of low face value i.e. Rs. 10/- or even lesspreference shares are of high face value i.e. Rs 100/
5.Market ValueMarket value of equity shares changes as per company’s financial positions and profitability.Market value of preference shares remains consent.
6.Riskequity shares are subject to higher riskpreference shares are subject to less risk
7.Right Issue/Bonus sharesEquity shareholders are eligible for bonus shares, if issued by the company.Preference Shareholders are not eligible for bonus shares/right issue, if issued by the company.
8.Nature of CapitalRisk Capital.Safe Capital.

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