Chapter 7 Flashcards
(12 cards)
Priority shares (first-preferred shares)
Shares that give the shareholder additional rights with respect to controlling interest
Participating preferred shares
Shares that give the holder priviliges with respect to profit distribution
Par value
The amount for which a share is registered on the balance sheet
Capitalized earnings value
The profit potentential of a company. Is calculated by the present value of expected future profits of a company.
Equity release motive
The original shareholders can partly or entirely release the capital invested in the company and use the proceeds for other purposes
Financing motive
The need for additional equity in the future can be covered easier by increasing the issued share capital
Management motive
The distance between the ownership and management widens, and shareholders will have less influence on the day-to-day business
PR-motive
Stock exchange listing increases the brand awareness of the company
Prestige motive
Stock exchange listing significantly increases the prestige of a company, which will be a real ‘player’ in the business world
Bonus shares
Shares offered free to existing shareholders and charged to the share premium
Guichet issue
When banks only act as a subscription office on behalf of a company
Prospectus
Contians information with respect to the
PLC’s situations, financial statements, a copy of the articles of association an the subscription prices of the issue`
