CONVERTIBLE PREFERENCE SHARES :

If the terms of issue of preference shares includes a right for converting them into equity shares at the end of a specified period they are called convertible preference shares. In the absence of such condition or right, the preference shares are not converted into equity shares to become eligible for various rights such as voting, higher dividend, bonus issue etc. as in the case of equity shares. These shares are some times referred to as quasi equity shares in common parlance. Companies may even charge a premium as part of the terms of conversion of preference shares, as they do sometimes while converting debentures into equity shares.