PDSnet Glossary

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Definition

These are the dividends paid on preference shares. Preference dividends are paid out, usually at a fixed rate, before any ordinary share dividend. Some preference shares are either convertible into ordinary shares at a future specified date or participate in the ordinary dividend in some manner. Such shares are known as "near equities" since they share some of the characteristics of equity shares. Cumulative preference shares accumulate their dividends in the years when it is not paid and the entire amount of the accumulated dividend must then be paid before ordinary shareholders can receive a dividend.

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