What Are Equity Securities?

Equity securities are generally referred to as stocks, which can be roughly divided into ordinary shares and preferred shares. Most of the equity securities listed on the Stock Exchange are ordinary shares and account for the majority of the trading volume.

Equity securities

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Equity securities are generally referred to as stocks, which can be broadly divided into

Holders of preference shares have priority to obtain the right to distribute negotiated dividends before shareholders of ordinary shares. Preference shareholders do not have the right to vote, but they can receive a fixed dividend (but the dividend will not increase due to the company's increased profits). In the event of the company's unfortunate liquidation, shareholders of preferred stock may obtain property distribution after creditors before common shareholders. Dividend preference shareholders can receive dividends if profits permit. As for accumulative preference shareholders, if there is no interest to be distributed in that year, the dividends that the holders shall accumulate will be distributed in one lump sum when the company has interest to pay. Even if the company recorded a profit that year, it may not necessarily announce a dividend.