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Preference shares |
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Preference 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.Similar MatchesPreferencesPreferences1. 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. Identical preferencesIdentical preferencesThe 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. Tax preference itemTax preference itemItems that must be included when calculating the alternative minimum tax. Community preferencesCommunity preferencesA set of consumer preferences, analogous to those of an individual as might be represented by a utility function, but representing the preferences of a group of consumers. The existence of well-behaved community preferences requires restrictive assumptions about individual preferences and/or incomes. Involuntary liquidation preferenceInvoluntary liquidation preferenceA premium that must be paid to preferred or preference stockholders if the issuer of the stock is forced into involuntary liquidation. Further Suggestionsstepped preference sharesLiquidity preference hypothesis Weak axiom of revealed preference Preference for variety Revealed preference Preference share Preference stock participating preference shares Loan Preference Principle Tariff preference Homothetic preferences cumulative preference shares Generalized System of Preferences redeemable preference shares |
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