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What is the benefit of convertible preferance share? Is it better than non convertible preference share?

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Question ajoutée par mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice
Date de publication: 2013/12/15
Thaikkattil Mathew Joshi
par Thaikkattil Mathew Joshi , Group Credit Controller , Gps Group,Dubai.

I agree with Mr. Rahul Sharma's opinion .In  addition,  Please note that, if the company is earning more profits ordinary shareholders only would be able to get the advantage. Where as preference shareholders will get the priority in dividend based on the fixed percentage.

So that ,Convertible  preference shareholders are better than non-convertible.

Joshi Mathew

CIA #1036906

Rahul Sharma
par Rahul Sharma , Manager Finance and Accounts , Gemini Impex General Trading LLC

Convertible Preference Shares: Convertible preference shares are those shares, which can be converted into equity shares on or after the specified date according to terms mentioned in the prospectus.

 

Non-Convertible Preference Shares: Non-convertible preference shares, which cannot be converted into equity shares. Preference shares are always being to be non-convertible, if the Article of the company is silent.

 

Convertible preference shares are always better than the non convertible as it carry the option for conversion into equity stock.

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