1.2c - Shareholding Flashcards
How many shareholders can there be in a LTD?
Between 2-50
How many shareholders can there be in a PLC?
Thousands
What must happen in order for someone to buy shares in a LTD?
All existing shareholders must agree
What are the roles of shareholders?
- Provide finance
- Vote on key decisions
Ordinary share capital definition
The money raised when selling shares for the first time
Ordinary share capital formula
Number of shares sold X price shares sold for
Initial public offering definition
The initial selling of shares
How does a PLC set a price on shares in an IPO?
- Value of company
- Size of company
How is price determined for shares once they are on the stock market?
- Supply
- Demand
Influences on the demand and supply of shares:
- Performance of company
- Rumours of new product launches
- Current share price
- Interest rates
What does market capitalisation calculate?
The value of a PLC
Market capitalisation formula
Current share price X number of shares issued
What is the market capitalisation of a large cap company?
Over £4 billion
What is the market capitalisation of a medium cap company?
Between £500 million and £4 billion
What is the market capitalisation of a small cap company?
Less than £500 million
