The revaluation and elimination of some of the firm's issued shares, resulting in a smaller number of shares of a higher value, with the overall market capitalisation of the company remaining unchanged

A feature of common stock that is a claim against the firm's cash flow or assets: if the firm is liquidated, those with prior claims are paid first and the common stockholders are entitled to what is left over, the residual

The division of the entity's shares into a greater number of units of smaller value, maintaining the overall market capitalisation of the company

A legal concept that means that losses of common shareholders are limited to the original amount of their investment. It also implies that the personal assets of a shareholder cannot be obtained to satisfy the obligations of the corporation.

The risk that tends to affect the entire market similarly; also known as market risk or nondiversifiable risk

The expected dividend expressed as a proportion of the price of the stock

A process in which shareholders vote by absentee ballot

The measurement of the extent to which a stock's returns are related to general market returns

The CAPM postulates the relationship between the expected return from a security and its systematic risk

Required (or expected) return on a risky security minus the return on a similar riskfree security

The issue of new shares to existing shareholders

A feature of a market if new orders pour in promptly in response to price changes resulting from temporary order imbalances

The tax amounts paid on dividends received

The process of selling a security before buying it, waiting for the market to fall and then buying the security to make the delivery required from his initial sale

A feature of preference shares that means the preference dividend remains constant regardless of any increase in the firm's earnings

Shares with betas greater than 1.0 that carry greater systematic risk than the market

The primary offering of a company that has never before offered a particular type of security to the public, meaning the security is not currently trading in the secondary market; an unseasoned offering

The ease with which an asset may be converted to cash without a loss in value

The right of the issuer to buy back shares from the holders

Preference shares that can be converted into ordinary shares at a predetermined ratio

Rights that may be sold on the market if shareholders do not want to subscribe to a rights issue and increase their shareholdings

A cash-flow stream that pays equal cash flows at the end of each period forever

A system in which larger institutions submit bids for blocks of stock in an IPO and, from these bids, the firm and its advisers decide what price or prices to charge the public and the institutions

A dividend that has had the full rate of tax, 30 per cent, paid on it, so that every $7 of dividend has a tax credit attached of $3

A feature of preference shares that means the firm cannot pay a dividend on its ordinary shares until it has paid the preference shareholders the dividends in arrears

Information that could affect market prices

A feature of a secondary market if orders exist both above and below the price at which a security is currently trading

A company scheme in which dividends are allowed to be reinvested into shares by shareholders, often at a discount to current market prices

The basic ownership claim in a corporation

The linear relationship between systematic risk (beta) and expected return

The amount that must be paid per share to buy a new issue

Trading by one person or a few people with information not known to the general investing public

The unique or security-specific risks that tend partly to offset one another in a portfolio

The process of acquiring a portfolio of securities that have dissimilar risk–return characteristics to reduce overall portfolio risk

Shares that confer preference over common shares in terms of dividend payments and the claim against the firm's assets in the event of bankruptcy or liquidation

The date on which a company ceases to effect transfers of its shares

A feature of a secondary market if the orders that give the market depth exist in significant volume

After a rights issue is finalised

The ratio of price per share to the earnings of the fi rm per share

Shares issued when partly paid for, so that there is an obligation on the holder to contribute the balance

Corporate payments to shareholders

Shares with betas less than 1.0 that carry less systematic risk than the market.

Preferred shares issued with adjustable rates. The dividends are adjusted periodically in response to changing market interest rates.

An order to buy or sell at a designated price or at any better price

Rights that cannot be sold on the market. Shareholders have the option to subscribe to the rights issue or let the offer lapse.

Dollar-denominated claims issued by US banks, representing ownership of shares of a foreign company's stock held on deposit by the US bank in the issuing firm's home country

Offerings of new issues of shares or bonds

A share market index that is computed by calculating the total market value of the firms in the index and the total market value of those firms on the previous trading day. The percentage change in the total market value from one day to the next represents the change in the index.

The rate at which the value of the firm is expected to grow

A share market index that is first computed by summing the prices of the individual shares comprising the index; then the sum of the prices is divided by a 'divisor' to yield the chosen base index value

Buying and holding shares in a portfolio

The risk premium of the market portfolio

An order to buy or sell at the best price available at the time the order reaches the exchange