Preference share is a capital stock which provides a specific dividend that is paid before any dividends which takes precedence over common stock. Preferred stock shareholders do not enjoy any of the voting rights. The main benefit to owning preference shares are that the investor has a greater claim on the company's assets.
In general, there are four different types of preferred stock- (1) cumulative; (2)
non-cumulative; (3) participating; and (4) convertible preferred stock.