difference between Equity Capital and Preference capital?
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Answer Posted / akanksha
Eqity shares are those shares which do not have
preferential rights in case of payment of dividend and
repayment of capital..It is also known as ordinary
shares..It represents permanent capital..The rate of
dividend depends upon the earnings of company..The equity
shareholders enjoy normal voting rights..
Preference shares are those shares which have preferential
rights in case of payment of dividend and repayment of
capial...It can be considered as ownership capital..The
preference shares do not provide permanent share capital..
They do not enjoy normal voting rights at company
meetings..The preference shareholders get a regular
dividend..The dividend rate is fixed..
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