Peter owns 100 shares of a company. He receives a fixed rate of dividend from these shares. Which type of share has Peter purchased?

A.

equity shares

B.

preference shares

C.

ordinary shares

D.

priority shares

E.

investment security

B. preference shares

Explanation:

Option A is wrong because equity shares provide a different rate of dividends to a shareholder. Equity shares are known as ordinary shares. Therefore, option C is wrong.

There are no priority shares in the components of stockholders' equity. Hence option D is wrong.

Investment security does not give any dividends. So option E is wrong.

Option B is correct because preference shares give a fixed rate of dividend.