This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
From the various examples that have just been cited, the reader may construct a composite picture of preferred share issues. He will find that they range in their fixed dividend rate from as low as 4% to as high as 10%, with a marked preference among industrials for 7%. He will find that a great majority either are irredeemable or are redeemable at the option of the corporation, and that a small number are protected by sinking funds and by other provisions which make them, for all practical purposes, obligations of the corporation.
In the United States comparatively few preference shares are given voting power. In England, and more especially in Canada, the custom is just the reverse. It is, however, becoming more and more common in this country to give preferred shares some contingent voting power so that they may assume control, or at any rate exercise some influence, in case of default of payment of their regular dividends. There are many preferred shares that have some claim on dividends above their fixed rate; these are known as "participating preferred" shares. Special provisions regarding convertibility and redemption are found here and there. In general, it should be noted that shares may be preferred in a great many different respects and forms, and that it is therefore necessary to study each instance of preference separately.