In universal, there are Following four different types of favorite shares:
1) Redeemable and Non-redeemable:
A redeemable favorite shares are subject to the terms where they are responsive to be redeemed at either a set of time, or the company’s option or at the shareholder’s option. In other words, the company can purchase back favorite shares at a decided time and price.
Irredeemable or Non-redeemable favorite shares require not be repaid by the company apart from on winding up of the company. The company is not offering to purchase back the securities.
2) Accumulative and Non Accumulative shares:
Accumulate favorite shares provides the correct to the favorite shareholders to claim the dividends that are not paid in the last year and they are paid in preference to ordinary dividends.
For non- Accumulative or easy favorite shares, any dividends that are accrued or unpaid in the last year cannot be carried forward to the later year or years in respect of that year, and that is considered lost by the shareholders.
3) Convertible and Non-convertible shares:
Convertible favorite Shares are corporate fixed income securities that the shareholders have the option of converting them into a certain number of ordinary shares after a set time Isndian or on a specific date.
Non-Convertible favorite Shares are those which don’t have the option of their change into the equity shares.
4) Contributing and Non- Contributing
Contributing favorite Shares are entitled to a fixed special dividend and have the right to contribute more in the extra profits after payment of certain rates of dividend on equity shares.
A non- Contributing share is entitled to a fixed rate of dividend only. They don’t have such rights to contribute or claim for a part in the extra profits of a company.
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