What Is a Depositary Receipt (DR)? A Depositary Receipt (DR) is a financial instrument that represents ownership in a company’s shares, which are held by a depositary bank outside the company’s home country. DRs are issued by depositary banks to facilitate the trading of shares of foreign companies in the … …
Benefits of Preference Shares Priority in dividend payments: Preference shareholders have the right to receive dividends before common shareholders. This means that if a company is unable to pay dividends in full, preference shareholders will receive their dividends first. Fixed dividend: Preference shares typically come with a fixed dividend rate. … …
Overview of Weighted Average Market Capitalization Weighted Average Market Capitalization is a financial metric that is used to measure the size of a company in the stock market. It is calculated by multiplying the price per share of a company’s stock by the number of outstanding shares, and then taking … …
Voting Shares: What They Are and How They Work Voting shares are a type of stock that gives shareholders the right to vote on certain matters related to the company. When a company issues voting shares, it allows shareholders to have a say in the decision-making process of the company. … …
What is the Upstairs Market? In the Upstairs Market, trades are negotiated directly between buyers and sellers, rather than being executed on a centralized exchange. This allows for greater flexibility and confidentiality in the trading process. It also enables institutional investors to execute large trades without impacting the price of … …
What is Underwriting Spread? The underwriting spread is a term used in the financial industry to describe the difference between the price at which an underwriter purchases securities from an issuer and the price at which the underwriter sells those securities to investors. It is essentially the compensation that the … …
Meaning of Undersubscribed Stocks Undersubscribed stocks refer to shares of a company that have not been fully purchased by investors during an initial public offering (IPO) or a secondary offering. When a company decides to go public or issue additional shares, it sets a certain number of shares to be … …
What Are Worthless Securities? Worthless securities refer to financial instruments that have lost all value and are no longer considered to have any worth. These securities can include stocks, bonds, options, and other types of investments. When a security becomes worthless, it means that the investor has lost all of … …
What is Variable Ratio Write? Variable Ratio Write is a crucial concept in data storage that refers to the technique of writing data to storage devices in a variable ratio. In simple terms, it means that the amount of data written to the storage device is not fixed but varies … …
What is Value Change? Value change refers to the alteration or modification of the worth or significance assigned to something. It is a concept that is applicable to various aspects of life, including economics, psychology, and philosophy. Value change in stocks is a fundamental concept in the field of finance … …
The Definition of Unsubscribed Unsubscribed is a term commonly used in the context of email marketing and refers to individuals who have chosen to opt out or unsubscribe from receiving further communication from a particular sender or company. When a recipient unsubscribes, it means they no longer wish to receive … …
What is the Gray Market? The gray market refers to the trade of goods or securities through unofficial channels, outside of the authorized distribution networks or regulated exchanges. It involves the buying and selling of products or securities that are not yet officially released or are not available through traditional … …
What is GICS? The Global Industry Classification Standard (GICS) is a system used to classify and categorize companies into different industry groups based on their primary business activities. It was developed by MSCI and Standard & Poor’s (S&P) to provide a standardized framework for investors and analysts to compare companies … …
Definition of the Basic Materials Sector The Basic Materials Sector is a category of stocks that includes companies involved in the discovery, extraction, and processing of raw materials. These raw materials are used in the production of various goods and services, making the Basic Materials Sector a crucial part of … …
What are Stock Appreciation Rights (SARs)? Stock Appreciation Rights (SARs) are a type of equity compensation plan that companies use to reward their employees. SARs give employees the opportunity to benefit from the increase in the company’s stock price over a certain period of time. Unlike stock options, which give … …
What are Share Repurchases? When a company decides to repurchase its shares, it can do so in two ways: through an open market repurchase or through a tender offer. In an open market repurchase, the company buys back its shares on the open market, just like any other investor. In … …
Mechanics of Price-Weighted Index Selection of Component Stocks The first step in constructing a price-weighted index is selecting the component stocks. Typically, the index provider chooses a set of stocks that are representative of a specific market or sector. The selection process may involve various criteria, such as market capitalization, … …
What is Offering Price? The offering price is the price at which a company or entity sells its securities, such as stocks or bonds, to investors. It is the price at which the company is willing to offer its securities to the public or to a select group of investors. … …
A Comprehensive Example [STOCKS catname] Let’s consider a hypothetical scenario where a company, ABC Corporation, decides to go public and offer its shares to the general public. The company believes that going public will not only provide it with the necessary capital for expansion but also increase its visibility and … …
What is Company Guidance on Earnings? Company guidance on earnings refers to the practice of publicly disclosing information about a company’s expected financial performance for a specific period. It is a way for companies to provide investors and analysts with insight into their projected earnings and financial outlook. This guidance … …
What is Alphabet Stock? Alphabet stock is divided into two classes: Class A and Class C. Class A shares come with voting rights, while Class C shares do not have any voting rights. The founders, Page and Brin, hold the majority of the Class B shares, which have 10 times … …
Tracking Stock: Definition, Benefits, Risks, and Example Tracking stock is a type of equity security that is issued by a parent company to track the performance of a specific business unit or division. It is designed to give investors the opportunity to invest in a specific segment of a company’s … …
Tombstone Public Offering Ad: An Unusual Name Explained Have you ever wondered why a public offering is called a “tombstone”? It’s certainly an unusual name for a financial term, but there is a fascinating story behind it. The Origins of the Name The term “tombstone” originated in the late 19th … …
Theoretical Ex-Rights Price (TERP) The Theoretical Ex-Rights Price (TERP) is an important concept in the stock market that helps investors understand the potential value of a company’s stock after a rights issue. A rights issue is a way for a company to raise additional capital by offering existing shareholders the … …
What is a Share Certificate? A share certificate is a legal document that serves as proof of ownership for a specific number of shares in a company. It is issued by the company to the shareholder as evidence of their ownership stake in the company. Share certificates are commonly used … …
S&P 500 Index: The Ultimate Guide to Successful Investing Investing in the S&P 500 Index is relatively easy. One option is to invest in an index fund or exchange-traded fund (ETF) that tracks the performance of the index. These funds allow investors to gain exposure to the entire index without … …
What is Restricted Stock? Restricted stock refers to company shares that are granted to employees as part of their compensation package. Unlike regular stock, restricted stock comes with certain limitations and conditions that must be met before the shares can be fully owned by the employee. When an employee is … …
Definition of Realized Gain Realized gain refers to the profit that is obtained from selling an investment or asset at a price higher than its original purchase price. It is the actual gain that is realized or received when an investment is sold or liquidated. Realized gain can be realized … …
Rating in Finance: Definition In the world of finance, rating refers to the evaluation or assessment of the creditworthiness or financial stability of a company, government, or security. It is a crucial tool used by investors, lenders, and other financial institutions to determine the level of risk associated with a … …