Provided that the company makes a profit, a specified annual return paid on shares. The return is not, however, variable depending on profitability.

The preferential dividend payable on preference shares is often specified to be a fixed percentage of the nominal value (and any premium) paid up on the preference shares, for example, "6% preference shares". In such cases, the dividend is fixed unless otherwise stated in the preference share rights.

For more information, see Practice note, Preference shares: Fixed dividends.