How Do You Spell PRIORITY SHARE?
Pronunciation: [pɹa͡ɪˈɒɹɪti ʃˈe͡ə] (IPA) 
Pronunciation: [pɹa͡ɪˈɒɹɪti ʃˈe͡ə] (IPA)
Priority shares are a specific type of shares issued by a company that entitle their holders to certain privileges or benefits in comparison to common shares. These privilleges can include preferential treatment in terms of dividend payments, liquidation proceedings, or voting rights.
Typically, priority shares have a higher claim on the company's assets and profits, granting their holders a preferential right to receive dividends before common shareholders. This means that if the company becomes insolvent or is liquidated, priority shareholders are given preference in receiving their investment back ahead of common shareholders.
In addition to dividend preferences, priority shares may also have different voting rights than common shares. In some cases, priority shareholders may be granted additional voting power or have the ability to elect certain directors or exercise decision-making authority in specific circumstances. This special voting power often gives priority shareholders more influence over the company's strategic and operational decisions.
The terms and conditions for priority shares are determined by the issuing company and are typically outlined in its articles of association or bylaws. These provisions can vary widely, and it is crucial for potential investors to carefully review the specific terms associated with priority shares before making any investment decisions.
Overall, priority shares provide their holders with a superior status in terms of dividends, liquidation proceeds, and voting power, reflecting their higher rank in the company's capital structure compared to common shareholders.
The word "priority share" does not have a specific etymology of its own, as it is a combination of two separate terms: "priority" and "share".
1. Priority: The word "priority" originates from the Latin word "prioritas", which means "precedence" or "superiority". It is derived from the Latin word "prior", meaning "former" or "previous". In English, "priority" refers to something that is given greater importance, preference, or right to be done or dealt with before others.
2. Share: The word "share" comes from the Old English word "scearu", which means "division" or "portion". It is related to the Old High German word "scara", which has a similar meaning. In finance, a share refers to a portion of ownership in a company, typically represented by stock or equity.
