These shares are also referred to as priority shares, preference shares, preference shares, privileged stocks, priority shares or preferred stocks.

Put simply, a preference share is a share without voting rights. There is no possibility for the owner to vote on the further course of the company at the annual general meeting. In return, however, he receives the right to a preferential, usually higher dividend. In addition, preferred shares may have a higher rank in the event of company liquidation. That is, holders of the preferred shares are usually compensated first. The name shows that holders of preferred shares have a better starting position than holders of common shares in some situations. In addition, it should be said that preferred stocks are often cheaper than common stocks.

PREFERRED SHARES ARE ESPECIALLY SUITABLE FOR PRIVATE INVESTORS

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From an investor's point of view, preference shares are particularly suitable for investors with purely financial interests. There is no danger here of wanting to exercise control over a stock corporation. From a company perspective, preference shares are suitable for increasing the company's equity without having to relinquish control of the company in the form of voting rights on a pro-rata basis. 

The particularly lower purchase price, as well as the preference for the dividend distribution, increase the return for private investors and thus make the preference shares extremely interesting.

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