SlideShare ist ein Scribd-Unternehmen logo
1 von 12
Downloaden Sie, um offline zu lesen
PREFRENCE SHARES



SUBMITTED TO: MR. HIMAL PARIKH


  SUBMITTED BY: PRASHANT MAHARSHI
PREFRENCE SHARES




 Preference shares are those which have preferential right to
  the payment of dividend during the life-time of the
  company and a preferential right to the return of capital
  when the company is wound up.
TYPES OF PREFERENCE SHARES



 Cumulative and Non cumulative.


 Participating and Non Participating.


 Convertible and Non Convertible.


 Redeemable and Non Redeemable.
CUMULATIVE AND NON CUMULATIVE


 Holders of Cumulative preference shares are entitled to
  recover the arrears of preference dividend before any
  dividend is paid on equity shares.



 In the case of Non- cumulative Preference shares arrears of
  dividend do not accumulate and hence, if dividend is to be
  paid to equity shareholder in any year, dividend at a fixed
  rate for only 1 year will have to be paid to preference
  shareholder before equity dividend is paid.
Participating and Non Participating



 Participating Preference shareholders are not only entitle to
  only fixed rate of dividend but have the right to receive any
  surplus profit which remains after dividend has been paid
  at a certain rate to equity shareholders.



 Non Participating Preference shareholders are entitle to
  only fixed rate of dividend.
Convertible and Non Convertible



 Holder of Convertible Preference shares enjoy the right to
  get preference share converted into equity shares according
  to the terms of issue.




 Holder of Non Convertible Preference shares do not enjoy
  any such right.
Redeemable and Non Redeemable


 Redeemable Preference shares are those preference shares
 whose amount can be returned by the company to their
 holder within the life time of the company subject to the
 terms of the issue and fulfillment of certain legal conditions
 laid down in sec 80 of the companies act.




 The amount of Non Redeemable Preference shares can be
 returned only company is wound up.
BENEFITS

 Helpful in raising long-term capital for a company.


 Have first claim on profits and proceeds from the sale of the
  company’s asset at the time of bankruptcy.

 Have fixed rate of dividend for fixed number of years.


 Guaranteed Rate of Return.
DRAWBACKS


 Not traded in market like ordinary shares.


 Not available to retail investors.


 Not advantageous to investors form the point of view of
  control & management as preference share do not carry
  voting rights.

 Cost of raising preference share capital is higher.
WHO CAN BUY PREFRENCE SHARES?



 Financial Institution.




 Lending firms.




 Other investors through brokerage firm.
HOW TO SELL THESE SHARES?


 Through private placement via broker at a negotiated price.




 Price one receives depend upon financial state of the
  company.



 One may have to sell at discount which is negotiated price
  not the market price.
Thank You…

Weitere ähnliche Inhalte

Was ist angesagt? (20)

Shares and debenture
Shares and debentureShares and debenture
Shares and debenture
 
Underwriting
UnderwritingUnderwriting
Underwriting
 
Shares and its types
Shares and its typesShares and its types
Shares and its types
 
Preference Shares
Preference SharesPreference Shares
Preference Shares
 
Lease finance
Lease   financeLease   finance
Lease finance
 
Share capital
Share capitalShare capital
Share capital
 
Buy back of shares
Buy back of sharesBuy back of shares
Buy back of shares
 
Capital structure
Capital structureCapital structure
Capital structure
 
Dividend policy
Dividend policyDividend policy
Dividend policy
 
Cost of capital
Cost of capitalCost of capital
Cost of capital
 
Valuation of shares
Valuation of sharesValuation of shares
Valuation of shares
 
Capitalisation
CapitalisationCapitalisation
Capitalisation
 
Book building
Book buildingBook building
Book building
 
Buy back of shares
Buy back of sharesBuy back of shares
Buy back of shares
 
Types of companies
Types of companiesTypes of companies
Types of companies
 
Financial services
Financial servicesFinancial services
Financial services
 
Dividend policy
Dividend policyDividend policy
Dividend policy
 
Leasing
LeasingLeasing
Leasing
 
Issue of Shares
Issue of SharesIssue of Shares
Issue of Shares
 
OTCEI
OTCEIOTCEI
OTCEI
 

Ähnlich wie Prefrence Shares

VALUATION OF PREFERENCE SHARE
VALUATION OF PREFERENCE SHAREVALUATION OF PREFERENCE SHARE
VALUATION OF PREFERENCE SHAREdheeraj07021994
 
Business and share capital
Business and share capitalBusiness and share capital
Business and share capitalGaurav Kumar
 
Financial management malavika
Financial management  malavikaFinancial management  malavika
Financial management malavikaMalavika menon
 
equityshares-140210075809-phpapp02.pdf
equityshares-140210075809-phpapp02.pdfequityshares-140210075809-phpapp02.pdf
equityshares-140210075809-phpapp02.pdfManishaBharti52
 
Preferred Shares/Dividends, Options & Warrants
Preferred Shares/Dividends, Options & WarrantsPreferred Shares/Dividends, Options & Warrants
Preferred Shares/Dividends, Options & WarrantsVeristrat Inc
 
Accounts of limited company 1
Accounts of limited company 1Accounts of limited company 1
Accounts of limited company 1Sumit Sharma
 
Sources of Long term finance
Sources of Long term financeSources of Long term finance
Sources of Long term financePisa Tatin
 
Sources of Finance
Sources of FinanceSources of Finance
Sources of FinanceNandan Kumar
 
Security Analysis and Protifolito Management
Security Analysis and Protifolito Management Security Analysis and Protifolito Management
Security Analysis and Protifolito Management fazariaafra
 

Ähnlich wie Prefrence Shares (20)

Preference shares
Preference sharesPreference shares
Preference shares
 
VALUATION OF PREFERENCE SHARE
VALUATION OF PREFERENCE SHAREVALUATION OF PREFERENCE SHARE
VALUATION OF PREFERENCE SHARE
 
F.m ppt
F.m pptF.m ppt
F.m ppt
 
Business and share capital
Business and share capitalBusiness and share capital
Business and share capital
 
Source of fianace
Source of fianaceSource of fianace
Source of fianace
 
Financial management malavika
Financial management  malavikaFinancial management  malavika
Financial management malavika
 
equityshares-140210075809-phpapp02.pdf
equityshares-140210075809-phpapp02.pdfequityshares-140210075809-phpapp02.pdf
equityshares-140210075809-phpapp02.pdf
 
Preferred Shares/Dividends, Options & Warrants
Preferred Shares/Dividends, Options & WarrantsPreferred Shares/Dividends, Options & Warrants
Preferred Shares/Dividends, Options & Warrants
 
Presentation1
Presentation1Presentation1
Presentation1
 
Company law 2014
Company law 2014Company law 2014
Company law 2014
 
Company law 2014
Company law 2014Company law 2014
Company law 2014
 
Accounts of limited company 1
Accounts of limited company 1Accounts of limited company 1
Accounts of limited company 1
 
RIGHT ISSUES
RIGHT ISSUESRIGHT ISSUES
RIGHT ISSUES
 
Finance
FinanceFinance
Finance
 
Sources of Long term finance
Sources of Long term financeSources of Long term finance
Sources of Long term finance
 
Sources of Finance
Sources of FinanceSources of Finance
Sources of Finance
 
Issue of shares
Issue of sharesIssue of shares
Issue of shares
 
Security Analysis and Protifolito Management
Security Analysis and Protifolito Management Security Analysis and Protifolito Management
Security Analysis and Protifolito Management
 
Equity shares
Equity sharesEquity shares
Equity shares
 
UNIT - III CL.pptx
UNIT - III CL.pptxUNIT - III CL.pptx
UNIT - III CL.pptx
 

Mehr von Prashant Maharshi

Mehr von Prashant Maharshi (20)

A study on new ULIP guidelines and comparative analysis on new ULIP vis-a-vis...
A study on new ULIP guidelines and comparative analysis on new ULIP vis-a-vis...A study on new ULIP guidelines and comparative analysis on new ULIP vis-a-vis...
A study on new ULIP guidelines and comparative analysis on new ULIP vis-a-vis...
 
Retirement and Post Retirement Planning
Retirement and Post Retirement PlanningRetirement and Post Retirement Planning
Retirement and Post Retirement Planning
 
Real estate presentation
Real estate presentationReal estate presentation
Real estate presentation
 
Real estate mutual funds
Real estate mutual fundsReal estate mutual funds
Real estate mutual funds
 
Gold
GoldGold
Gold
 
Distressed Property
Distressed PropertyDistressed Property
Distressed Property
 
Conversion of Farm Land
Conversion of Farm LandConversion of Farm Land
Conversion of Farm Land
 
Basis Of Finanacial Planning
Basis Of Finanacial PlanningBasis Of Finanacial Planning
Basis Of Finanacial Planning
 
All Marketers Are Liars
All Marketers Are LiarsAll Marketers Are Liars
All Marketers Are Liars
 
Algorithmic Trading
Algorithmic TradingAlgorithmic Trading
Algorithmic Trading
 
Buyback
BuybackBuyback
Buyback
 
Delisting
DelistingDelisting
Delisting
 
Takeover of Companies
Takeover of CompaniesTakeover of Companies
Takeover of Companies
 
Alfa laval's delisting
Alfa laval's delistingAlfa laval's delisting
Alfa laval's delisting
 
Open offer on tax liability
Open offer on tax liabilityOpen offer on tax liability
Open offer on tax liability
 
Is Indian Constitution obsolete?
Is Indian Constitution obsolete?Is Indian Constitution obsolete?
Is Indian Constitution obsolete?
 
Indian Insurance Sector
Indian Insurance SectorIndian Insurance Sector
Indian Insurance Sector
 
MIS in Banking
MIS in Banking MIS in Banking
MIS in Banking
 
Role of HRD in Aviation Industry
Role of HRD in Aviation IndustryRole of HRD in Aviation Industry
Role of HRD in Aviation Industry
 
Capital expenditure evaluation of Reliance Media Works
Capital expenditure evaluation of Reliance Media WorksCapital expenditure evaluation of Reliance Media Works
Capital expenditure evaluation of Reliance Media Works
 

Kürzlich hochgeladen

Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...mwangimwangi222
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024Neil Day
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfMichael Silva
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxPrecize Formely Leadoff
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTindexPub
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023SkillCircle
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Guillaume Ⓥ Sarlat
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklosbeduinpower135
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfMichael Silva
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Commonwealth
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMZakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMFaisal834049
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdfAdnet Communications
 

Kürzlich hochgeladen (20)

Effects & Policies Of Bank Consolidation
Effects & Policies Of Bank ConsolidationEffects & Policies Of Bank Consolidation
Effects & Policies Of Bank Consolidation
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
 
E-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in GhanaE-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in Ghana
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdf
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptx
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklos
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdf
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMZakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
 

Prefrence Shares

  • 1. PREFRENCE SHARES SUBMITTED TO: MR. HIMAL PARIKH SUBMITTED BY: PRASHANT MAHARSHI
  • 2. PREFRENCE SHARES  Preference shares are those which have preferential right to the payment of dividend during the life-time of the company and a preferential right to the return of capital when the company is wound up.
  • 3. TYPES OF PREFERENCE SHARES  Cumulative and Non cumulative.  Participating and Non Participating.  Convertible and Non Convertible.  Redeemable and Non Redeemable.
  • 4. CUMULATIVE AND NON CUMULATIVE  Holders of Cumulative preference shares are entitled to recover the arrears of preference dividend before any dividend is paid on equity shares.  In the case of Non- cumulative Preference shares arrears of dividend do not accumulate and hence, if dividend is to be paid to equity shareholder in any year, dividend at a fixed rate for only 1 year will have to be paid to preference shareholder before equity dividend is paid.
  • 5. Participating and Non Participating  Participating Preference shareholders are not only entitle to only fixed rate of dividend but have the right to receive any surplus profit which remains after dividend has been paid at a certain rate to equity shareholders.  Non Participating Preference shareholders are entitle to only fixed rate of dividend.
  • 6. Convertible and Non Convertible  Holder of Convertible Preference shares enjoy the right to get preference share converted into equity shares according to the terms of issue.  Holder of Non Convertible Preference shares do not enjoy any such right.
  • 7. Redeemable and Non Redeemable  Redeemable Preference shares are those preference shares whose amount can be returned by the company to their holder within the life time of the company subject to the terms of the issue and fulfillment of certain legal conditions laid down in sec 80 of the companies act.  The amount of Non Redeemable Preference shares can be returned only company is wound up.
  • 8. BENEFITS  Helpful in raising long-term capital for a company.  Have first claim on profits and proceeds from the sale of the company’s asset at the time of bankruptcy.  Have fixed rate of dividend for fixed number of years.  Guaranteed Rate of Return.
  • 9. DRAWBACKS  Not traded in market like ordinary shares.  Not available to retail investors.  Not advantageous to investors form the point of view of control & management as preference share do not carry voting rights.  Cost of raising preference share capital is higher.
  • 10. WHO CAN BUY PREFRENCE SHARES?  Financial Institution.  Lending firms.  Other investors through brokerage firm.
  • 11. HOW TO SELL THESE SHARES?  Through private placement via broker at a negotiated price.  Price one receives depend upon financial state of the company.  One may have to sell at discount which is negotiated price not the market price.