Introduction Stock split can be referred to as a division of shares into shares with a lower face value. The overall mechanics are structured in a manner in which total market capitalization of the stock post-split tends to remain the same. This means that the entire value of the total value of the holding day […]
Do Stocks Usually Go Up After A Split? Explanation with Analysis Read More »
A successful venture manages its business well, continues to expand beyond geographical and technological boundaries. At first, the business chooses to get listed in a stock market (often over-the-counter) with an IPO to go public. Listing shares on a stock market invites investors and helps a company grow with its vision. Often with the large
Is a Stock Split Good? Pros & Cons, Implications, KeyPoint You Should Know Read More »
The agency theory says that business managers are agents for the shareholders of the company. The prime duty of the agents is to maximize the shareholders’ wealth. The company management or BOD precisely formulates the strategic plan for the company. Listed companies have a limited number of shares outstanding and for trading in the stock
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In subjective terms, it isn’t a problem for any shareholder to know if their company is going for a stock split in the near future. All listed companies share their financial reports quarterly and annually through exchanges and publish them to make accessible for shareholders. Any significant news relating to the company is also disclosed
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Introduction Over the course of time, it can be seen that equity finance has emerged as one of the top-notch choices of financing when it comes to enterprises looking to raise money for their operations. Equity financing can be described as a way of raising finance by the company, against a share of ownership in
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Definition The market value of debt is the price or amount that an investor is willing to pay to buy a company’s debt instrument. This amount is usually different from the book value present in the company statement of financial position. Alternatively, it is the cost of replacing the debt if the company replaces it
How to Calculate the Market Value of Debt? (Definition, Formula, and Example) Read More »
Conversion premium is the term used in the financial market in connection with convertible securities. Thus, to understand the conversion premium, the reader should have a clear concept of convertible securities. Convertible securities As the name suggests, conversion securities are the select type of securities, “which are convertible into something else.” What that “something else”
What is the Conversion Premium? And How Issuer Uses Conversion Premium? Read More »
Definition Irredeemable debt stands for debt with no maturity date and pays regular interest rates for an unlimited time. Theoretically, we presume that the debt’s nominal (par) value is never reimbursed to the debt holders. Instead, they get in return a benefit from an infinite number of coupons or interest payments. Irredeemable debt is also
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Definition Convertible debts are a type of hybrid security instrument that has the same features as normal debts such as interest payments but also comes with the option to be converted into common equity shares of a company. The option to convert the debt to common equity shares lies with the debt holder or the
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Definition A company’s weighted average cost of capital is the cost of all its equity and debt instruments proportionately weighted. These instruments may include common shares, preferred shares, and debt instruments of a company. The cost of capital is the required rate of return of a company on any project. The cost of capital of
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