Types of Equities Flashcards
1
Q
Two Types of Shares
A
- Ordinary Shares
- Preferred Shares
2
Q
Priority upon liquidation
A
Preferred Shares - 1st
Ordinary Shares - 2nd
3
Q
Dividends
A
Ordinary Shares - Variable
Preferred Shares - Fixed
4
Q
Voting
A
Ordinary Shares - YES
Preferred Shares - NO
5
Q
Special Features of Ordinary Shares
A
- Non - Voting
- Party Paid
- Deferred
6
Q
Special Features of Preferred Shares
A
- Cumulative
- Participating
- Convertible
- Redeemable
7
Q
Cumulative
A
Dividend not paid this year , rolls up to be paid in future year
8
Q
Redeemable
A
Issuer can force holder to relinquish share in return for the nominal value
9
Q
Convertible
A
Able to convert to ordinary shares
10
Q
Participating
A
May receive bonus dividend along with ordinary holders
11
Q
Example of defensive Share
A
Utility Companies
12
Q
Important point about order of liquidation
A
Debentures paid before Equity holders
