1.2c Shareholding Flashcards
How many shareholders can there be in Ltd’s?
Between 2-50
What must happen in order to buy shares in a Ltd company?
All other shareholders must agree
Trading of Plc shares on stock exchange usually requires the use of what?
A stockbroker
Roles of shareholders
- Provide finance for a business
- Vote on key decisions
- Have access to company’s information
Ordinary share capital definition
Money raised when selling shares for the first time.
Ordinary share capital formula
Ordinary share capital = number of shares sold x price they were sold for
What are shares initially sold through?
An initial public offering
How is price set on shares in initial public offering?
Based on the value and size of the company
How is price set on shares on the stock exchange?
How many are available to be bought and demand
What does market capitalisation calculate?
The value of a Plc
Market capitalisation formula
Market capitalisation = current share price x number of shares issued
Value of a large cap company
Greater than £4 billion
Value of a medium cap company
Between £500 million and £4 billion
Value of a small cap company
Lower than £500 million
What cap company are most likely to be targeted for mergers?
Medium cap companies
