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Preference shareholders are given a preference over ordinary shareholders in the payment of dividends and distribution of assets in the event of liquidation
They do not contain any voting rights
Dividends are not tax deductible
Preference stock payments are cumulative. If the dividends are not fully paid for a given period then they are carried forward to the next period. The past and present dividends have to be paid before any payments are paid to ordinary stock holders
Unpaid preference share dividends are not a liability to the firm hence the firm can suspend preference share payments
Preference shares can have adjustable rates according to the prevailing rate of interest
Preference shares may be callable or redeemable. They also be convertible to ordinary shares at a fixed ratio
Dana05 answered the question on July 18, 2019 at 19:27
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