There are two types of shares, ordinary shares and
preference shares.
·
Ordinary shares are the most familiar type of shares and
have flexible dividends (dividends that are adjusted in relation to a company's profit). These shares also allow full
voting rights.
·
Preferred shares carry fixed dividends, which must be paid
before any dividends are paid to ordinary shareholders. However, preferred
shares do not allow voting rights.
Remember that when dealing with
shares in the stock market as we
know it, it will practically always be involving ordinary shares and this
should not be a very big issue!
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