These are the different types of preference shares:

Cumulative

A cumulative preference share means that if the company is unable to pay the dividend at any time, the unpaid dividends will accumulate and must be paid out before any dividends can be paid to common shareholders. This feature ensures that shareholders will eventually receive their due dividends, reducing the risk associated with missed payments.

Non-cumulative

Missed dividends do not accumulate. These shares usually offer higher yields to compensate for the higher risk.

Redeemable/callable

A callable preference share means that the issuing company has the right to redeem (buy back) the shares at a predetermined price after a certain date. This option allows the company to potentially reduce its dividend payments if it can secure cheaper financing in the future, providing financial flexibility.

Perpetual

These do not have a redemption date, and investors must sell them on the market to recoup their investment.