Equity: Intro to Equity Securities Flashcards
American Depository Reciept
A US dollar-denominated security that trades like a common share on US exchanges.
American Depository Share
The underlying share on which American Depository receipts are based. They trade in the issuing companies domestic market
Basket of listed depository reciepts
An exchange traded fund (ETF) that represents a portfolio of depository receipts
Blue Chip
Widely held large market capitalization companies that are considered financially sound and are leaders in their respective industry or local stock market
Common shares
A type of security that represents an ownership interest in a company
Convertible preference shares
A type of equity security that entities shareholders to convert their shares into a specified number of common shares.
Cumulative preference shares
Preference shares for which ant dividends that are not paid accrue and must be paid in full before dividends on common shares can be paid
Depository Bank
A bank that raises funds from depositors and other investors lends it to borrowers.
Depository reciept
A security that trades like an ordinary share on a local exchange and represents an economic interest in a foreign company
Foreign exchange gains (or losses)
Gains (or losses) that occur when the exchange rate changes between the investors currency and the currency that foreign securities are denominated in
Free float
The number of shares that are readily and freely tradable in the secondary market
Global depository receipt
A depository receipt that is issued outside of the company’s home country and outside of the United States.
Global Registered Share
A common share that is trades on different stock exchanges around the world in different currencies
Leverage buyout
A transaction whereby the target company’s management team converts the target to a privately held company by using heavy borrowing to finance the target company’s outstanding shares
Management BuyOut
A leveraged buyout event in which a group of investors consisting primarily of the company’s existing management purchase at least controlling interest in outstanding shares. At the extreme, they may purchase all shares and take the company private
Non-Cumulative preference shares
Preference share for which dividends that are not paid in the current or subsequent period ls are forfeited permanently (instead of being accrued and paid at a later date)
Non-participating preference shares
Preference share that do not entitle shareholders to share profits of the company. Instead, shareholders are only entitled to receive a fixed dividend payment and the par value of the shares in the event of liquidation.
Participating preference shares
Preference shares that entitle shareholders to receive the standard preferred dividend plus the opportunity to receive an additional dividend if the company’s profits exceed a pre-specifies level.
Preference Shares
A type of equity interest who ranks above common shares with respect to the payment of dividends and the distribution of the companies net assets uppon liquidation. They have characteristics of both debt and equity securities
Private Equity Securities
Securities that are not listed on public exchanges and have no active secondary market. They are issued primarily to institutional investors via non-public offerings, such as private placements
Private investment in public equity
(PIPE) an investment in the equity of a publicly trade firm that is made at a discount to the market value of the firms shares
Sponsored
A type of depository receipt in which the foreign company whose shares are held by the depository has a direct involvement in the issuance of the receipts.
Statutory voting
A common method of voting where each share represents one vote
Unsponsored
A type of depository receipt in which the foreign company whose shares are held by the depository has no involvement in the issuance of the receipts
Venture capital
Investments that provide “seed” or startup capital, early-stage financing, or later-stage financing (including mezzanine-stage financing) to companies that are in early development stages and require additional capital for expansion or preparation for an IPO
Vote by Proxy
A mechanism that allows a designated party- such as another shareholder, a shareholder representative, or management-to vote on the shareholders behalf
