High return expected because of high risk. The issue, if taken up by new shareholders will reduce the proportionate shareholding of existing shareholders. A fixed percentage of dividends paid. If points are low the dividend can be carried forward to future years. Less voting rights than ordinary shares.
Most preference shares are irredeemable.
Dividends are not tax deductible 2. Any cumulative arrears of dividends are payable 3. Not usually attractive as ordinary or loan stock. A fixed percentage of interest is paid per year until the option has been exercised - this will give the company time, before its equity is enlarged to build up profitability with the finance it has raised. Attractive to investors because of the option to convert to equity.