What is meant by a 'Share' ? Give any two differences between 'Preference Shares' and 'Equity Shares'.
Share refers to a unit into which the share capital of a company is divided. It includes the stock of the company and represents ownership claims on business.
|Basis of Difference||Preference Shares||Equity Shares|
|Participation in Management||Preference shareholders have right to participate in the management only in special circumstances.||Equity shareholders have right to participate in management.|
|Sequence of Dividend||Fixed rate of dividend is received||Dividend to equity shareholders is paid only if there is surplus after paying off preference shareholders|
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- Types of Shares - Preference Shares Equity Shares