WEAK AREAS Flashcards
Which participant allows firms to focus on the core areas of their business, and not investment?
Third-Party-Administrators
What is a rights issue?
Approaching existing shareholders with an offer to purchase new shares, before offering to open market. This means that their position won’t be diluted if they choose to hold.
What does renounceable mean in terms of rights issues?
A shareholder can sell the rights on to another investor. Rights issues can be offered at a discount to market price.
How are bonus issues formatted in the UK?
1:2 means 1 for 2. So 1 bonus share for every two held. X new shares for every Y held.
What is the ex-dividend date?
The date after which the dividend won’t be paid.
How are bonus issues formatted in the US?
First number is the final holding, second number is the original number of shares. E.g. 5:4, for every 4 shares you hold, you now will own 5.
X:Y, X/Y * Nominal
What does FRN stand for?
Floating rate note, bonds with variable rates of interest.
Linked to a benchmark rate such as the bank lending rate (SONIA/SOFR)
How many cash flows could you break a 3 year gilt into?
- 6x semi annual coupon payments, 1x maturity repayment. These are known as gilt strips.
What does a company wanting to gain admission to AIM have to appoint?
A nominated advisor (NOMAD), they advise directors of their responsibilities in complying with AIM rules.
What are the 3 different requirement between a AIM and a Full Listing?
No trading history vs. 3 years trading history
No min market cap vs. £30m min market cap
No min float vs. 10% min float
How does a Quote-Driven system differ to an Order-Driven system?
Quote-driven employs market makers to provide liquidity, whereas Order-Driven is orders by market participants.
What does SEAQ stand for?
Stock Exchange Automated Quotation (Quote-Driven System)
What 2 exchanges use SEAQ?
NASDAQ and LSE. LSE uses two systems.
What does SETS stand for?
Stock Exchange Electronic Trading Service (Order-Driven System)
What two exchanges use Order-Driven Systems?
NYSE and LSE
What system is used for less liquid stocks on the LSE?
SETSqx