Chapter 1 - Share Capital Flashcards
1
Q
Theoretical Prices/Values
A
Theoretical ex-rights price is the theoretical price that the class of shares will trade at on first day of trading
2
Q
Theoretical Ex-rights formula
A
(N + cum rights price) + Issue price
————————————
N + 1
3
Q
Fixed Charge
A
Debt secured against a specific asset
4
Q
Floating charge
A
Debt secured against the general assets of the company
5
Q
Yield on Debt
A
Return on a traded bond
This is the annual interest payment
6
Q
Yield to Maturity
A
Effective average annual percentage return relative to the current market value
7
Q
Yield to Maturity
For irredeemable debt
A
YTM = (Annual Interest Received / Current market value of debt) * 100%
8
Q
IRR
A
A discount rate which gives a zero NPV
