How preferred shares are classified, how preferred shares are classified

Preference share or preferred stock is relative to common share. It mainly refers to the priority over ordinary shares in terms of the right to profit dividends and the distribution of residual property.

Preferred shareholders do not have the right to vote and be elected, and generally have no right to participate in the company's operation, and preferred shareholders cannot withdraw their shares, but can only be redeemed by the company through the redemption terms of preferred shares, but can stabilize the dividends of shares.

There are several main classifications of preferred shares:

1) Cumulative Preferred Shares and Non-Cumulative Preferred Shares. Cumulative preference stock refers to the fact that, in a given business year, if the profit earned by the company is insufficient to pay the prescribed dividends, the shareholders of future preference shares have the right to claim the full amount of dividends paid in previous years. For non-cumulative preferred shares, although the company has the right to receive dividends in preference to the profits obtained by the company in the current year over the ordinary shares, if the profits obtained by the company in that year are insufficient to distribute the dividends according to the regulations, the shareholders of the non-cumulative preferred shares cannot request the company to make up the dividends in subsequent years.

Generally speaking, cumulative preferred stock has greater advantages over non-cumulative preferred stock for investors.

2) Participating Preferred Shares and Non-Participating Preferred Shares. When the company's profits increase, in addition to enjoying the interest of the established ratio, the preferred shares that can also participate in the profit distribution together with the common shares are called "participating preferred shares". Preferred shares that no longer participate in the distribution of profits, in addition to the established dividends, are called "non-participating preferred shares".

In general, participating preferred shares are more beneficial to investors than non-participating preferred shares.

3) Convertible Preferred Shares and Non-Convertible Preferred Shares. Convertible preferred stock is one that allows the holder of preferred shares to convert eugenic shares into a certain amount of common stock under certain conditions. Otherwise, it is a non-convertible preferred stock.

Convertible preferred shares are a type of preferred stock that has become increasingly popular in recent years.

4) Recoverable Preferred Shares and Non-Recoverable Preferred Shares. Recoverable preferred shares refer to companies that are allowed to issue such **, and the preferred shares that have been incurred will be recovered according to the original ** plus a certain amount of compensation. This right is often exercised when the company believes that it can replace the preferred stock that has incurred with a lower dividend**.

Otherwise, it is a non-recoverable preferred stock.

Types of Preferred Shares 1. Cumulative Preferred Shares and Non-Cumulative Preferred Shares** Cumulative Preferred Shares are preferred shares that accumulate unpaid dividends in previous business years and are paid together with earnings in subsequent business years**. Non-cumulative preferred shares are preferred shares that pay dividends based on the earnings of the current year, and no retroactive dividends will be paid on the accumulated underpaid dividends**. 2. Participating in the distribution of preferred shares and not participating in the distribution of preferred shares Participating in the distribution of preferred shares refers to the kind of preferred shares that can not only receive a fixed dividend of the current year according to the regulations, but also have the right to participate in the distribution of the company's profits together with ordinary shareholders**.

Non-participation in the distribution of preferred shares refers to preferred shares that only receive dividends according to the prescribed dividend rate and do not participate in the distribution of the company's profits**. 3. Convertible Preferred Shares and Non-Convertible Preferred Shares Convertible preferred shares are preferred shares in which the holder can convert preferred shares** into common shares** or corporate bonds under certain conditions. Non-convertible preferred stock is preferred stock that cannot be converted into common stock** or corporate bonds**.

4. Redeemable Preferred Shares and Non-Redeemable Preferred Shares Redeemable Preferred Shares refer to the preferred shares that can be recovered by the issuing company at a certain rate. Non-redeemable preferred shares are preferred shares that the issuing company does not have the right to redeem from the holders. 5. Dividend Convertible Preferred Shares and Dividend Non-Convertible Preferred Shares Dividend convertible preferred shares refer to preferred shares whose dividend yield can be adjusted**.

Dividends are non-fungible preferred shares that do not allow the dividend yield to be adjusted.

It's very deep, but I didn't expect there to be so many kinds of preferred shares.

Upstairs is already very specific.

Priority to complete this hosiery stock classification:1) Cumulative Preferred Shares and Non-Cumulative Preferred Shares;

2) Participation in Preferred Shares and Non-Participation in Preferred Shares;

3) Convertible Preferred Shares and Non-Convertible Preferred Shares.

Classification of Preferred Shares:

Depending on how dividends are distributed, preferred shares can be divided into several categories:

1) Fixed Dividend Rate Preferred Shares and Floating Dividend Rate Preferred Shares: If the dividend rate preferred shares are not adjusted during the duration of the shares, they are called fixed dividend rate preferred shares, and those that are adjusted according to the agreed calculation method are called floating dividend rate preferred shares.

2) Mandatory Dividend Preferred Shares and Non-Compulsory Dividend Preferred Shares: The company can stipulate in the articles of association that if the profits must be distributed to the preferred shareholders when there are distributable after-tax profits, it is a mandatory dividend preference shares, otherwise it is a non-mandatory dividend preferred shares.

3) Cumulative preferred shares and non-cumulative preferred shares: According to whether the company has not paid dividends to preferred shareholders in full due to insufficient distributable profits in the current year, the difference can be divided into cumulative preferred shares and non-cumulative preferred shares. Cumulative preference stock means that when the company's profit in a certain period is insufficient to pay the dividend of preference stock in the current year, the dividend payable is accumulated to the next year or a subsequent year's profit, and the dividend is paid together with the dividend of the current year's preference stock before the dividend on the common stock is paid.

Non-cumulative preferred shares, on the other hand, mean that when the Company is unable to pay the full dividends of the preferred shares, the shareholders of the preferred shares cannot request the company to make up the dividends owed in the following years.

4) Participating Preferred Shares and Non-Participating Preferred Shares: Whether the preferred shareholders have the right to participate in the distribution of the remaining after-tax profits together with the ordinary shareholders after the dividend rent is distributed according to the determined dividend rate, can be divided into participating preferred shares and non-participating preferred shares. Preferred shares in which the holder can only receive certain dividends but cannot participate in the company's additional dividends are called non-participating preferred shares.

In addition to receiving dividends at a prescribed dividend rate, holders can also share the company's remaining earnings with common shareholders in preference shares, which are called participating preference shares.

5) Convertible Preferred Shares and Non-Convertible Preferred Shares: According to whether the preferred shares can be converted into common shares, they can be divided into convertible preferred shares and non-convertible preferred shares. Convertible preferred shares refer to those in the regulations.

6) Repurchaseable preferred shares and non-repurchaseable preferred shares: According to whether the issuer or preferred shareholders have the right to request the company to repurchase preferred shares, they can be divided into repurchaseable preferred shares and non-repurchaseable preferred shares. Repurchaseable preferred shares refer to the preferred shares that are allowed to be repurchased by the issuing company at the issue price plus a certain percentage of compensation proceeds.

This method is generally used to repurchase existing preferred shares** when a company believes that it can issue new preferred shares at a lower dividend yield. Preferred shares that do not have a buyback clause attached are referred to as non-repurchaseable preferred shares.

Shareholders who hold preferred shares have certain preferential rights over shareholders of common shares, such as the preferential distribution of profits and residual property rights of the company. Holders of preferred shares enjoy more power, but shareholders of preferred shares do not participate in the production and operation of the company. So how should preferred shares be divided?

What are the criteria for division?

Preference of preferred shares: When the company is profitable, the preferred shares can carry out the villain in the proportion promised by the common shares. In the event of the bankruptcy of the shares due to poor management or other reasons, the shareholders of the preferred shares shall have a preferential share of the remaining assets of the company after the settlement of the shares over the ordinary shares. Performing shares can be classified as cumulative preferred shares and non-cumulative preferred shares, and those that do not pay interest in the business year can be paid in the aggregate of the financial profits of the next year to become cumulative preferred shares.

Non-cumulative preferred shares are dividends from the current year's earnings, and if the company does not pay dividends due to poor management, dividends without distribution cannot be accumulated.

Preferred shares will not participate in the operation of the company, do not have the right to vote on any decisions of the company, and the holders of preferred shares do not interfere with the management and operation of the company. Preferred shares can be withdrawn in the company, and the company will allocate fixed shares to the holders of preferred shares, and preferred shares in a valid joint-stock company are actually a way to borrow and raise funds.

Participation in the distribution of preferred shares is a preferred stock in which the holder can receive a fixed dividend for the current year in accordance with the regulations and has the right to participate in the distribution of profits. Preference shares do not participate in fixed dividends and cannot participate in other dividends. Convertible preferred shares are preferred shares that can be converted into ordinary** or bonds under certain conditions, while non-convertible preferred shares are preferred shares that cannot be converted into other preferred shares.

It can also be divided into redeemable and non-redeemable, redeemable means that the issuer has the right to take back the preferred shares, and there are no redemption conditions for the irrevocable preferred shares.

<> preferred shares are symmetrical "Privus shares", which are shares issued by a joint-stock company that have priority over ordinary shares in the distribution of dividends and residual property.

Preferred shares are also a kind of indefinite warrant of entitlement, which has the following characteristics:

1) Preferred shareholders do not participate in the company's dividend distribution, have no voting rights and have the right to participate in the company's operation and management.

2) Preferred shares have a fixed dividend, which is not affected by the company's performance, and can receive dividends before ordinary shareholders.

3) When the company goes bankrupt and the property is liquidated, the preferred shareholders have the right to claim the remaining property of the company before the ordinary shareholders.