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What are preference shares? What are their features?
Preference shares are those shares which are given preferential treatment as compared to equity shares.
Features of Preference Shares:
1) Return on Investment : It is in the form of dividend and rate of dividend is prefixed and pre communicated to the investors.
2) Not Owners : Investors in preference shares are not the owners of the company.
3) Return of Capital : Capital raised by the company by way of preference shares are required to be repaid during the existence of the company.
4) Non participation in management : Preference shareholders do not participate in the affairs of the company.
5) Risk: The risk is more on the part of the company.
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