Preference share is a component of share capital that may have any combination of features not possessed by ordinary shares, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preference shares are different from ordinary shares in that their owners are given certain preferred rights compared to ordinary shareholders. The rights attached to preference shares are set out in the company's memorandum of articles or constitution. Typically, Preference shares entitles the holder to a fixed dividend over a specific period, whose payment takes priority over that of ordinary share dividends.

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