Equities Flashcards
What rights do basic shareholders get?
Attend AGMs and EGMs
Vote at the AGM
Receive a share of company profits
Subscribe to new shares.
What class of share receive voting rights? Ordinary or Preference?
Ordinary
What are the 5 stages of an IPO?
1) Decision
2) Appointment of an underwriting firm
3) Prepare prospectus
4) Marketing to investors
5) Sale of securities
When can an IPO take place without a prospectus?
To list without a prospectus the offering must not be made to the general public but to sophisticated investors. Also known as placing.
What is an example of a non-dilutive offering?
Redistribution of existing shares (e.g. Directors Shares)
What is the term given to a listing which offers no new shares?
Introduction
What problems arise with bearer shares?
1) Money laundering is made easier
2) Issuers have trouble finding who to pay dividends to
3) The physical security is important and can increase holding costs.
With regards to depositary receipts, what is the longest time period permitted for grey market trading?
3 months
What type of orders are available for input during the opening auction?
Only limit and market orders are available for input during the opening auction.
What is the special ex-trading period for equities?
Ten business days
Equities are being issued by tender. The minimum offer price in the prospectus is 200p. You offer 300p. The maximum price offered is 350p. The common strike price set by the company is 245p. What price will you pay?
245p
All shareholders applying for shares pay the common strike price.
A private equity firm takes a position in a quoted company on the Alternative Investment Market. According to the FCA’s Disclosure and Transparency Rules (DTR) what is the minimum percentage at which they must disclose their interest?
Where the private equity firm acquires 3% of the voting rights.
The question relates to a private equity firm rather than a “fund manager”. A fund manager would disclose at 5%
