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in Grade 12 by Master (844k points)

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Distinguish between ordinary and preference shares
Ordinary shares Preference shares
Ordinary shares only receive dividends when profit is made Some of these types of shares receive dividends√ regardless of profit made.
Normally the higher the profit, the higher the dividend A fixed rate of return is paid on this type of shares
Shareholders are the last to be paid, if the company is declared bankrupt/liquidated Shareholders have a preferred claim on company assets in the event of bankruptcy/liquidation
Ordinary shares are standard shares with no special rights or restriction. These shares enjoy preferential rights to dividends/repayment over ordinary shares
Dividends vary from year to year according to profits made as determined by the company

> Dividends are payable according to the type of preference share. Non-cumulative preference.

 > shareholders will not receive any outstanding dividends from previous years. OR > Cumulative shareholders will receive outstanding dividends from previous years.

Shareholders have a right to vote√ at the Annual General Meeting. Voting rights are restricted to particular circumstances/resolutions
Examples:  Such as Sasol/Telkom, etc.

 Examples: Cumulative/Non-cumulative/ Redeemable/Non-redeemable/ Participating/Non-participating/ Convertible/Non-convertible.

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