There are two main types of shares - common shares and preferred shares. Common shares give shareholders partial ownership, voting rights, and dividend income from company profits. Preferred shares give ownership but no voting rights, and priority over common shares for recovery of money if the company winds up. Preferred shares may also accumulate unpaid dividends or convert to common shares depending on their specific features. Shares are divided into different classes to provide varying dividend and voting rights to shareholders.

3. •One of the equal parts into which a company's capital is
divided, entitling the holder to a proportion of the profits.
•Share is a document that represents a unit of ownership
of the company in the hands of shareholder.
•The equity papers that represent ownership of company
are referred to as shares.

5. COMMON/ORDINARY SHARES
 Common stock holders have partial ownership
 They enjoy voting rights in the company
 They receive dividend income from the net income of the
company.
 In the event of bankruptcy, common stock shareholders
are entitled to assets left over after creditors,
bondholders and preferred shareholders have been paid
in full.

6. PREFERED SHARES
 The holders have ownership but no voting rights in
management decisions
 They have preference over the ordinary share holders in
recovery of their money in the event of winding up of
company
 This kind of equity is also called hybrid equity because it
contains the features of both stock & bond.
 The preferred stock holders obtains fixed regular
dividend just like the coupon interest receipt of bond
holder.

7. CUMULATIVE PREFERENCE SHARES
 Shareholders have the right to accumulate dividend
payments that were skipped in earlier years.
 They are the first to receive payments once the company
resumes dividend payout.
NON CUMULATIVE PREFERENCE
SHARES
 Shareholders do not accumulate skipped dividend
payments

8. CONVERTIBLE
 Shareholders receive more than the normal dividend
payments if the company makes more than expected
profit.
PARTICIPATING
 Shareholders can convert the preferred stock into a
specified number of shares of common stock

9. Rationale For Division Of
Shares
 Provide different dividend rights for different
shareholders
 Provide voting rights to one class only, or restricted
voting rights to one class, or weighted voting rights to
one class.
 Keep certain rights within one group of people; for
example, employees or one family.
 To increase investment limit of different economic
groups