ORDINARY SHARES VERSUS PREFERENCE

COMPARE AND CONTRAST
ORDINARY SHARES VERSUS
PREFERENCE SHARES

ORDINARY SHARES
 Right to give vote only in meetings.
 Represent ownership of equity.
 Done by Ownership percentage.
 Receive dividend after preference
shareholders.
 first priority for preference
shareholders.

PREFERENCE SHARES
 Known as “Preferred Stock”.
 Dividend offered to shareholders.
 In case of bankruptcy: shareholders
are paid from the assets of the company.
 Right of capital repaid.
 Profits receive before the ordinary shareholders.

COMPARE AND CONTRAST ORDINARY SHARES
VERSUS PREFERENCE SHARES
 Rate of dividend
a.) Ordinary shares: variable rate
b.) preference shares: fixed rate
 By owning preference shares does
not guarantee the payment dividend.

COMPARE AND CONTRAST ORDINARY SHARES
VERSUS PREFERENCE SHARES
 Period of dividend received
a.) ordinary shares: after
payment of preference shares .
b.) preference shares: payment
on first priority.

COMPARE AND CONTRAST ORDINARY SHARES
VERSUS PREFERENCE SHARES
 Types of shares
a.) Ordinary shares: Management
shares.
b.) preference shares: Basic,
cumulative and redeemable shares.
 Risk
a.) ordinary shares: High
b.) preference shares: Low

COMPARE AND CONTRAST ORDINARY SHARES
VERSUS PREFERENCE SHARES
 Voting rights
a.) Ordinary shares: Voting rights
at annual general meetings.
b.) preference shares: No voting rights.
 Equity
a.) Ordinary shares: Equity
b.) preference shares: Does not own equity.

REFERENCES
 Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of
managerial finance. Pearson Higher Education AU.
 Law, J. (Ed.). (2016). A dictionary of business and
management. Oxford University Press.
 Briston, R. J. (2017). The stock exchange and investment
analysis. Routledge.
 Pilbeam, K. (2018). Finance & financial markets. Macmillan
International Higher Education.
 Keynes, J. M. (2018). A tract on monetary reform. Pickle
Partners Publishing.