Question

What is meant by a 'Share' ? Give any two differences between 'Preference Shares' and 'Equity Shares'.

Answer 1

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