preference shares

preference shares
Shares in a company which usually receive a fixed dividend each year and which, if redeemed, are redeemed at par value. Although the dividend ( dividends) is fixed, it is not guaranteed. However, if the company fails to pay ('passes') the preference dividend it will not be allowed to pay an ordinary dividend for the year to ordinary shareholders. Where the preference shares are cumulative, any arrears of preference dividend will also have to be paid prior to the ordinary dividend being paid in any year. Preference shares may be redeemable, when they will be redeemed at a set date. They may also be convertible. Finally, they may be participating, which means that in addition to the fixed dividend, they will receive a variable dividend dependent on the performance of the company. Dresdner Kleinwort Wasserstein financial glossary
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See preferred shares Euroclear Clearing and Settlement glossary
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These are normally fixed-income shares whose shareholders have the right to receive dividends before ordinary shareholders would rank above ordinary shareholders for the repayment of their investment in the company. London Stock Exchange Glossary

Financial and business terms. 2012.

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Look at other dictionaries:

  • preference shares — have preferred rights that rank ahead of ordinary shares. The rights are commonly (1) a dividend of fixed percentage of their nominal value payable annually on set dates, often cumulative (i.e. if not paid the dividend is carried forward Easyform …   Law dictionary

  • Preference Shares — Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a company bankruptcy, preferred stock shareholders have a right to be paid company assets first. Preference shares typically… …   Investment dictionary

  • preference shares — noun stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights • Syn: ↑preferred stock, ↑preferred shares • Hypernyms: ↑stock • Hyponyms: ↑cumulative preferred, ↑cumulativ …   Useful english dictionary

  • preference shares — N PLURAL Preference shares are shares in a company that are owned by people who have the right to receive part of the company s profits before the holders of ordinary shares are paid. They also have the right to have their capital repaid if the… …   English dictionary

  • preference shares — / pref(ə)rəns ʃeəz/ plural noun shares (often with no voting rights) which receive their dividend before all other shares and are repaid first (at face value) if the company goes into liquidation (NOTE: The US term is preferred stock.) COMMENT:… …   Dictionary of banking and finance

  • preference shares — See preferred shares …   Euroclear glossary

  • preference shares — preferred stock …   English contemporary dictionary

  • preference shares — A British term for *preferred stock …   Auditor's dictionary

  • preference shares — Same as preferred stock …   Ballentine's law dictionary

  • fixed rate preference shares — Shares issued wholly for new consideration with no conversion rights or rights to acquire further shares or securities, which carry dividends of a fixed amount or fixed rate per cent of the nominal value. The dividends (plus any amount paid on… …   Law dictionary

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