Preference shares also known as preferred stock are basically shares of a company’s stock with the dividends that are paid out to shareholders before common stock dividends are issued out.
And if that company at any point enters bankruptcy their preferred stockholders are entitled to be paid from the company left over assets before common stockholders.
Keep in mind that most preference shares have some kind of a fixed dividend. Where common stocks generally dont have that.
Investors in the preferred shares also normally dont hold any voting rights, but common shareholders usually do.
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