1. Non-Cumulative or Simple Preference Share:
A non-cumulative or simple preference shares gives right to fixed percentage dividend of profit of each year. In case no dividend thereon is declared in any year because of absence of profit, the holders of preference shares get nothing nor can they claim unpaid dividend in the subsequent year or years in respect of that year.
2. Cumulative Preference Share:
Cumulative preference shares however give the right to the preference shareholders to demand the unpaid dividend in any year during the subsequent year or years when the profits are available for distribution . In this case dividends which are not paid in any year are accumulated and are paid out when the profits are available.
3. Irredeemable Preference Shares : Irredeemable Preference shares means preference shares that need not repaid by the company except on winding up of the company.
4. Redeemable Preference Shares:
Redeemable Preference shares are preference shares which have to be repaid by the company after the term of which for which the preference shares have been issued.
5. Non-Participating Preference Shares:
A non-participating share is one which does not such right to participate in the profits of the company after the dividend and capital have been paid to the preference shareholders.
6. Participating Preference Shares:
Participating Preference shares are entitled to a preferential dividend at a fixed rate with the right to participate further in the profits either along with or after payment of certain rate of dividend on equity shares.
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