Equity Securities

Question 1

Equity shares types ARE and Level of risk

Answer 1

Callable (company buy back) - most risky
Option free
Putable (you sell when you want)

Question 2

Participating preference shares (2) benefits

Answer 2

Fixed dividend
+ determined tax over performance

Additional distribution upon assets liquidation

NOT a contractual benefit

Question 3

Unsponsored depository receipts

Answer 3

Repository BANK has the voting RIGHT
investor does not have the right

Question 4

BLDR (Basket of listed depository receipts)

Answer 4

ETF of depository receipts

Question 5

Cumulative preference of shares

Answer 5

MUST receive DIVIDENDS

BEFORE firm pay any dividends to common

Question 6

What are the facts that depository receipts return depends?

Answer 6

Fundamentals,
analysts recommendations
MAKET conditions
Exchange rate moviments

Question 7

What is a MBO transaction and when it accours?

Answer 7

When managers buyout the assets of a business that they run

OCCURS when there are many ASSETS UNDERVALUED