# ordinary shares v preference shares. what's the difference?



## StaroftheSea (22 Dec 2008)

Hi all,
please excuse my ignorance, but i don't know the difference between ordinary shares you can buy through a stockbroker and 'preference shares' which for the same company come at a much bigger price... could anyone explain this to me please....
thanks,
mikeljoe


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## ClubMan (23 Dec 2008)

Have you tried _Wikipedia _for some info on the two terms?


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## c00lcarl (31 Dec 2008)

"Preference shares, unlike ordinary shares, have no ownership or voting rights. The holders of preference shares are entitled to receive dividends (based on an annual % coupon/interest rate) and seek repayment (redemption) of their investments at a specified time. 

quoted from http://www.enterprise-ireland.com/Grow/Finance/preferencesharesdescription.htm


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## WaterSprite (1 Jan 2009)

That enterprise ireland info is not actually correct - there's nothing to say that preference shares do not have ownership or voting rights (although the memo and arts may say that each preference share has rights of voting *as if* they were ordinary shares - same diff)...  Odd that they should say as much but they may be referring to their own policy on the type of preference shares that enterprise ireland buys when it invests in companies...

The basic differences between ordinary and preference shares are:
(i) pref shareholders generally get paid a dividend; and
(ii) they are first to be cashed out ahead of other shareholders

That said, you can add all sorts of bells and whistles to preference shares (or none - the minimum requirement to be a preference share, to my mind, is the right to get one's money first in the event of a sale/liquidation)

Sprite


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