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Class A or Class B shares |
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Class A or Class B sharesSee: Classified stockClass A or Class B shares Similar MatchesRedeemable preference sharesRedeemable preference sharesPreference shares which the issuing company reserves the right to redeem. The shares may, or may not have a specific redemption date or dates. Recovery sharesRecovery sharesShares which have fallen in value but are considered to be capable of recovering to their former price. Income sharesIncome sharesShares bought in anticipation of an above average income being produced. Also referred to as high yield shares. All this really means is that the investor chooses shares in companies that have a history of paying consistently high dividends. There is no guarantee that the companies will continue to provide the same level of dividends in the future.Those shares in a split capital investment trust which receive most or all of the trust's income. The other class of shares (capital shares) get the benefit of the trust's capital growth Ordinary sharesOrdinary sharesCompanies are incorporated with an authorised share capital - for instance 1,000 ordinary £1 shares. They do not have to issue all the authorised shares, but can issue as many as they like up to the authorised number.Once issued the shares can be traded either privately or on an exchange if the company has listed them. The price at which they trade will have nothing to do with the par value, but will be determined by market forces. Broadly speaking, if there are more willing buyers than sellers, the price will rise; if there are more sellers than buyers, it will fall.Shares usually come with a right to vote at the company's Annual General Meeting, and an entitlement to a share of dividends declared. They are, however, unsecured. This means that shareholders are last in the queue if a company goes bust and has to sell off its assets. If the amount realised is enough to pay off all creditors, the shareholders may salvage something. If it isn't, the shares will be worthless. Preference sharesPreference sharesShares in a company which give their holders an entitlement to a fixed dividend but which do not usually carry voting rights. The important difference between preference and ordinary shares are:The dividend on ordinary shares is uncertain and variable (high when the company does well, poor or non-existent when it does badly). Preference shareholders get a fixed dividend which, if not paid, usually accrues until it can be.Each ordinary share usually carries a vote. Preference shares do not usually carry a vote unless dividends fall into arrears.In the event of a winding up, preference shares are usually repayable at par value, and rank above the claims of ordinary shareholders (but behind bank and trade creditors).Preference shares may be issued with the right of conversion into ordinary shares. These are called convertibles. Further SuggestionsSharesPaired shares beta shares American shares guilder shares (New York Shares) delta shares cumulative preference shares alpha shares Capital shares permanent interest bearing shares Identified shares penny shares Common shares capital shares participating preference shares Treasury Shares Fully diluted earnings per shares nil paid shares stepped preference shares Shares authorized Ordinary shares windfall shares Performance shares Outstanding shares bearer stocks/shares |
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