Shares, Shareholders & Share Prices

• Company


  A company is a separate legal entity.

  The owners of a company are shareholders
• What is an LTD?

  • Private Limited Company
  • Most popular form of incorporated business
  • Privately-owned
  • Shares cannot be traded publicly
• What is a PLC ?

  • Minimum share capital £50,000
  • Shares may be traded on a public stock market
  • Usually many shareholders
• What is a Dividend ?

  Payments made to shareholders by the company from earned profits
• What is a share ?

  An individual part of the issued share capital of a company
• What is Market Capitalisation ?

  • Market capitalisation represents the total market value of the issued share capital of the company.
• What is a Profit Warning ?


  Unexpected warnings indicating that market expectations will not be met almost always result in a significant fall in share price.
• Share Capital

  • Known as equity finance
  • Returns: dividends and capital growth
• Debt

  • Most commonly in the form of loans or overdrafts
  • Return: interest on amount loaned and outstanding
• Flotation


  Share issued on Stock Exchange for the first time

  Opportunity for existing shareholders to realise profits on their investment.
• Rights issue

  Fresh issue of new shares to existing shareholders.

  Shareholders have the “right” to subscribe for the new shares, usually at a significant discount to the existing share price.