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What is the meaning of redeemable preference shares and irredeemable preference shares?
Redeemable Preference Shares means Repayable shares. The dividends on these shares are must for the business, and those are normally a percentage of the par value. The business treats them like a liability.
Irredeemable preference shares are like ordinary shares. The business pays dividends on these as well, but its up to the business. If its profit is big enough to pay dividends, business will surely give, otherwise the business has the right whether to give or not.
Note that preference shares are given priority over ordinary shares at the time of paying dividends.
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