4.4 Comparison between Equity Shares and Preference Shares

PointEquity (ordinary)PreferenceDividendResidual — after all prioritiesPriority — the fixed-rate dividend firstWinding upLast in the surplusPriority over equity on capital returnVotingThe full vote (the default)Generally no vote (except where their rights are affected — the protective triggers)Return of capitalNo redemption (the permanent capital)May be redeemable (the company's buy-back on terms)Arbitration of riskThe owners of the venture's upside and downsideThe quasi-creditor's position — comfort firstTypes—Cumulative, non-cumulative; participating; convertible; redeemable