GENERAL KNOWLEDGE

Detailed explanation-1: -Preference shares, also called preferred stocks, enable preference shareholders to receive dividends announced by companies before ordinary shareholders. For instance, if companies decide to pay dividends to their shareholders, preference shareholders are the first to receive dividend payouts from the company.

Detailed explanation-2: -Preference shareholders have priority on payment of dividend over equity shareholders. However, in the case of interim dividend, while preference shareholders need not necessarily be paid dividend before equity shareholders.