What Are Preference Cumulative Participating Share, Differed Share, Convertible Preferred Share And Callable Share?
Preference Cumulative participating share: These shares are not only accumulative of profits but also participate in the profit which is left over after the ordinary shares are paid. Suppose the preference cumulative participating share are issued at 10 percent .First they will get divided at this rate. The ordinary share will also be distributed at the same rate i.e. 10 percent. If the profit still remains, the balance will be distributed prorate to both the classes of shares . 2 Differed share: They are issued to founders (promoters) of the company. They have a special right to the dividend. Deferred share enjoy the right to all the profit left over after the payment to ordinary share. Usually companies avoid issuing such shares because they cast doubts and anxiety on ordinary shareholders. 3 Convertible preferred Share : convertible preferred shares are, basically such share are preference share but posses an additional characteristic of being convertible into common stock on the de
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