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What is an ordinary share, and what is a preference share?

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What is an ordinary share, and what is a preference share?

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  1. An ordinary share gives you some voting rights and a dividend if the company pays a dividend.  The preferred shares generally pay a bit more in dividends but have no voting rights.

    Also, if the company is forced to suspend dividends, ordinary shareholders lose first and once the company has regained the ability to pay dividends, preferred shareholders must receive back dividends before ordinary shareholders once again receive any dividends (and never in arrears).

    Those are just a couple of differences.  Common (ordinary) shares probably change hands more frequently and therefore are more liquid.

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