Preference and Equity Share Difference

Equity share has the second priority of capital repayment over the preference share.

Rate of Dividend

The rate of dividend is fixed for the preference share. The rate of equity share dividend may vary from time to time depending upon the terms and conditions made by member and directors.

Dividend Arrears

Arrears of the dividend may mount up for these shares. Arrears of equity shares can not be mount up in any case.

Convertibility

They may be converted.  They can not convert

Market Value Fluctuation

Market value of preferred share normally does not fluctuate Market value of equity share fluctuates according to market conditions.

Voting Rights

Preferred share holders have voting rights only at their class meetings but they do not have other voting rights. Equity share holders commonly have voting rights.

Right of Premium on Redemption

Preferred share holders have right to gain premium on redemption. Equity share holders do not have a right to receive premium on redemption.

Redeem Ability

They are redeemable throughout the entire life of a firm. They are not redeemable throughout the entire life of a firm unless a firm makes a decision to buy back its shares.