Purpose and benefits

Evaluating convertible preference shares is principally an analysis of risk rather than of a company.
Preference shares are listed as equity on a balance sheet, but perform more like bonds than ordinary shares, since most of these issues pay a fixed dividend set at the time of issue.
While holders of preference shares are entitled to a fixed dividend, they do not usually have voting rights.
Preference shares are usually repayable at par value, and rank above the claims of ordinary shareholders but behind bank and trade creditors.