MANAGEMENT

Detailed explanation-1: -Owners of preference shares receive fixed dividends, well before common shareholders see any money. In either case, dividends are only paid if the company turns a profit.

Detailed explanation-2: -Preference shares are issued to the shareholders with a fixed rate of dividend.

Detailed explanation-3: -The preferential dividend payable on preference shares is often specified to be a fixed percentage of the nominal value (and any premium) paid up on the preference shares, for example, “6% preference shares". In such cases, the dividend is fixed unless otherwise stated in the preference share rights.

Detailed explanation-4: -Preference shares are usually fixed-income shares that do not participate in the success of the company. Consequently, they are considered to be a less risky form of investment than ordinary shares.