State any two types of preference share.

Preference shares are a type of equity security that combines features of both equity and debt. Here are two types of preference shares:

1. Cumulative Preference Shares These shares accumulate any unpaid dividends from previous years if the company fails to declare dividends in a particular year. The accumulated dividends are paid before any dividends are distributed to common shareholders. This ensures that preference shareholders receive their full dividend entitlement over time, even if it is deferred.

2. Participating Preference Shares These shares entitle the holder not only to a fixed dividend but also to participate in additional profits beyond the fixed rate. This means that after paying the fixed dividend, if there are surplus profits, participating preference shareholders may receive a share of these extra profits, usually alongside common shareholders.