What is the difference between preference shares and ordinary shares? - Seedly
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Asked by Anonymous

Asked on 23 Oct 2018

What is the difference between preference shares and ordinary shares?

I googled it, but still don't really understand what it means

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Lok Yang Teng
Lok Yang Teng
Level 8. Wizard
Answered on 27 Oct 2018

preference share

a share which entitles the holder to a fixed dividend, whose payment takes priority over that of ordinary share dividends.

Let's say the company is not earning as much, they'll give the promised dividends to those with preference shares and reduced dividend for those with ordinary shares.

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