Preference shares


 

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Preference shares

Shares 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.



Similar Matches

Cumulative preference shares

Cumulative preference shares

When a company fails to pay a dividend, holders of cumulative preference shares are entitled to receive this missed payment when a dividend is next declared. This rule is cumulative and they are also entitled to the current dividend provided sufficient cash is available. These payments receive priority over the claims of ordinary shareholders.


Preferences

Preferences

1. In trade policy, this refers to special advantages, such as lower-than-MFN tariffs, accorded to another country's exports, usually in order to promote that country's development. See GSP. 2. In trade theory, this refers to the attitudes of consumers toward different goods, as represented by a utility function. Some propositions in trade theory use the assumption of identical and/or homothetic preferences.


Revealed preference

Revealed preference

The use of the value of expenditure to "reveal" the preference of a consumer or group of consumers for the bundle of goods they purchase compared to other bundles of equal or smaller value. Used by Samuelson (1939) and Ohyama (1972), especially, to examine the gains from trade.


Preference for variety

Preference for variety

The increased utility that people experience when they have access to a larger number of differentiated product varieties. In reality this may reflect their ability to find products more closely suited to their own particular needs, but as modeled in the Dixit-Stiglitz utility function, they are better off consuming small quantities of each of a larger number of products.


Identical preferences

Identical preferences

The assumption that individuals -- either within a country or in different countries -- have the same preferences. To be useful, since individuals' and countries' incomes may differ, the assumption is often used together with homothetic preferences.


Further Suggestions

Generalized System of Preferences
Tariff preference
Weak axiom of revealed preference
Loan Preference Principle
participating preference shares
redeemable preference shares
Involuntary liquidation preference
Homothetic preferences
Community preferences
Preference share
stepped preference shares
Liquidity preference hypothesis
Tax preference item
Preference stock


 
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