Ordinary shares, or equity shares, are the most common type of stock issued by a company. When you buy ordinary shares, you’re essentially purchasing a piece of ownership in the company. This ownership comes with certain rights and potential rewards, but also some risks.
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Think of preference shares as a special class of stock that grants investors certain privileges over common stockholders. The key benefit lies in dividends. Preference shareholders have the right to receive dividend payouts before any dividends are distributed to common shareholders. These dividends are typically fixed, meaning they represent a set percentage of the face value of the share.
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Shares and stocks are terms often used interchangeably, and they both refer to ownership in a company. However, there are some subtle differences between the two.
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