Financial literacy and more
There is another type of share which is issued by companies that are called preference shares.
These shares have a fixed amount of dividend that is paid out each year.
The rate of dividend is usually mentioned in front of the shares.
These shares do not give the same ownership rights as equity shares.
The amount on these shares are paid before the equity shareholders are paid in case of closing down of the company.
A company that does not have its shares listed on a stock exchange is an unlisted company.
An investor can buy shares for such a company from other shareholders or through a new issue.
There is no visible price which gives an idea about the value of the investment.
There is also a lower amount of liquidity in such shares as a buyer or seller needs to be found to transact.
Many investors buy shares in unlisted companies wanting to profit from it when these companies get listed on a stock exchange at some later date.