09 - Equity Financing

  1. Hybrid Finance
    Provided by securities issued by companies that have characteristics of both debt and equity.

    - Preference shares and convertible securities.
  2. Proxy
    Means of voting in which a designated party is provided with the temporary power of attorney to vote for the signer at the firm's annual meeting.
  3. Pre-emptive Right
    Right entitling the ordinary shareholder to maintain his or her proportionate share of ownership in the firm.
  4. Floatation
    First public issue of shares and/or debt by a company.
  5. Underwriting
    The purchase and subsequent resale by an underwriter of new securities that have been taken up by the public by the closing date of the issue.
  6. Stags
    Investors who purchase new shares through a prospectus and sell on the first day that the shares are quoted by the stock exchange, in order to make a profit.
  7. Dilution
    Any action of a company that results in a reduction of ordinary shareholders interests.

    - if new shares are issued but not made available to current shareholders.
  8. Rights Issue
    An issue of rights to existing shareholders.
  9. Cum-rights Price
    Price paid for the purchase of an ordinary share which includes the right to subscribe for an announced new share issue.
  10. Ex-rights Price
    Price paid for the purchase of an ordinary share which excludes the right to subscribe to a new share issue that has recently closed.
  11. Placement
    Offer of financial securities directly to selected potential purchasers, in contrast to a public offering.
  12. Convertible Securities
    Debt or preference shares that can be converted to ordinary shares by the holder subject to specified conditions.
  13. Security Value
    Term applied to a convertible security for the price it would sell for in the absence of its conversion feature.
  14. Conversion Value
    Value of the shares for which a convertible security can be exchanged.
  15. Conversion Premium
    Price paid by purchasers of a convertible security for the option to convert to shares.
Card Set
09 - Equity Financing
211 - Equity Financing