Preference Shares, also known as preferred stock or preferred shares, are a type of corporate equity that provides certain privileges to the holder, such as a fixed dividend and priority in the event that the company is liquidated. Preference shares are typically issued by companies as a way to raise capital and offer investors a different type of investment opportunity than common shares.Preference shares typically have a fixed dividend that must be paid before dividends are paid to holders of common shares. They may also have a higher priority in the event that the company is liquidated, meaning that the holders of preference shares are entitled to receive their investment back before common shareholders receive any proceeds.Preference shares may also have additional features, such as the right to convert to common shares or the right to participate in the upside potential of the company through the payment of additional dividends or capital appreciation.Preference shares can offer investors a higher level of income and security than common shares, but they generally do not have the same upside potential. It is important for investors to carefully consider the terms and features of preference shares before making an investment.
