A preference share, also known as a preferred stock or simply "preferred," is a type of security that represents ownership in a corporation, similar to common stock. However, preference shares have some features that distinguish them from common shares.
The main difference is that preference shares typically have a fixed dividend payment that must be paid out to shareholders before any dividends can be paid to common shareholders. This fixed dividend rate may be expressed as a percentage of the share's par value or as a fixed dollar amount.
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