Question

 Equity shares and Preference shares.

Answer 1

S.R	EQUITY SHARES	PREFERENCE SHARES
1	Meaning These are the ordinary shares which can claim dividend and return of capital only after payment to others.	These are the shares that enjoy preference over equity shares in case of dividends and return of capital.
2	Rate of Dividend Equity shares are paid a dividend at a fluctuating rate.	Preference Shares are paid a dividend at a fixed rate.
3	Voting Rights Equity shareholders enjoy normal voting rights, through which they participate in the management of the company.	Preference shareholders enjoy restricted voting rights. They can vote only on those matters which affect their interest directly.
4	Face Value Equity shares are of low face value i.e. Rs. 10/- or even less.	Comparatively, preference shares are of high face value i.e. Rs 100/-.
5	Market Value The market value of equity shares changes as per the company’s financial positions and profitability.	The market value of preference shares remains consent.
6	Risk    An element of risk exists in equity share capital as dividend and return of capital is uncertain.	Investment in preference shares is relatively safe due to preferential treatment in case of dividends and return of capital.
7	Right Issue/Bonus shares Equity shareholders are eligible for bonus shares if issued by the company.	Preference Shareholders are not eligible for bonus shares/right issues if issued by the company.
8	Redemption Equity shares are not redeemed during the lifetime of the company.	Redeemable preference shares are redeemed as per the agreed terms.