Equity/Stocks chp 3

What is the term used for the long-term borrowing of a company?

Which type of shares may involve the investor having their name recorded on the share register?

What is the alternative to holding shares in registered form?

What is the electronic record of ownership for shares referred to when issued in a non-certificated basis?

How do bearer certificates prevent their use in financial crime?

In what way does ownership of bearer shares pass to a new owner?

What type of company can issue shares to the public?

In the UK, how can you differentiate a public limited company (plc) from a private company?

What is the main implication of limited liability for shareholders?

What documents are required to be lodged to form a company in the US?

Which term is used interchangeably with ordinary shares or common stock?

If a shareholder subscribes for 30 ordinary £1 shares in a UK company, how much will they pay?

What happens if ordinary shares are only partly paid and the company goes bankrupt?

Which characteristic is common to ordinary shares, common shares, and common stock?

What is a common indication that a UK company is public rather than private?

What is one of the key differences between private and public companies according to the text?

In a company, who has the legal priority over ordinary shares in terms of earnings and assets?

What is the term used to describe shares where only part of the nominal value has been paid up?

What happens if dividends cannot be paid in a particular year for cumulative preference shares?

Who are the owners of a company that vote on resolutions at company meetings?

What happens if shareholders vote 'no' to a resolution proposed by the company directors?

What is the term used to describe shares with characteristics of both debt and equity?

What do liquidators do in relation to the remaining balance of partly paid shares when a company goes into liquidation?

'Preference shares have legal priority over ordinary shares.' What does this mean?

'Partly Paid Shares' require shareholders to pay the remaining balance when called upon. This is an example of:

'Preference shares pay a fixed dividend each year.' Which aspect of preference shares does this statement refer to?

What is a 'naked or uncovered dividend'?

Why do companies seek to pay steadily growing dividends?

How is the dividend yield calculated?

Why might a company have a higher-than-average dividend yield?

In terms of shareholder benefits, what are 'perks' that some companies offer?

What happens if a shareholder makes an unrealized capital gain?

Why do shares need to be sold to realize capital gains?

What does it mean when preference shares are described as 'non-cumulative'?

In what circumstances would convertible preference shares typically be converted into ordinary shares?

What is the main benefit of owning shares in a company?

What happens to the dividend of non-cumulative preference shares if the company does not make sufficient profits?

What is a characteristic of redeemable preference shares?

How are dividends paid out for cumulative preferred shares?

What distinguishes participating preference shares from other types of preference shares?

What is the main difference between perpetual and redeemable preference shares?

In what circumstance might directors of a company offer a larger dividend for participating preference shareholders?

What is a key characteristic of irredeemable preference shares?

How does owning preference shares differ from owning ordinary shares?

What is the purpose of pre-emption rights for existing shareholders in companies?

How does the UK handle pre-emption rights compared to the US?

In the example of ABC plc shares, what percentage did the investor hold before the new share issue?

What is a rights issue according to the text?

How are votes allocated for ordinary shareholders at company meetings?

What is a common way for individual shareholders to vote without attending a company meeting?

How do some companies ensure control by certain shareholders even with a smaller proportion of shares?

In what form are most shares held these days?

What type of shareholder response have approaches such as those used by Alphabet met with?

What does it mean for a nominee company to be described as 'bankruptcy remote'?

What is the main risk associated with holding shares in general?

Which event on 19 October 1987 led to a significant decrease in worldwide equities?

What is the potential benefit that shares offer when a company is successful?

Which factor contributes to determining the level of risk associated with holding shares of a company?

What was the significant impact on share prices during 'Black Monday'?

What sparked a surge in internet stocks, many of which were quoted on the NASDAQ exchange?

What was the percentage decline in the NASDAQ in 2008?

Which type of shares tends to exhibit more price risk due to global economic trends?

What does the term 'liquidity risk' in equities refer to?

What does issuer risk refer to in equity investments?

What is a characteristic of thinly traded companies in relation to liquidity risk?

In what scenario might an investor have difficulty selling their shares at a reasonable price?

'Nasdaq index crashed to below 2000' refers to which financial event?

'Enron and Lehman Brothers' collapses highlighted which type of financial risk?

'Equity markets worldwide fell due to the coronavirus pandemic' is an example of what type of financial event?

'Shares in new companies with no reported profits may have substantial issuer risk.' This statement relates to which type of risk?

What type of corporate action is a rights issue, as described in the text?

In the US, how are corporate actions classified according to the text?

What does a securities ratio specify in a corporate action according to the text?

How is a bonus issue expressed in terms of securities ratios in European and Asian markets?

What would be the result of a 5:4 bonus issue by a US company if an investor holds 10,000 shares?

What does it mean when a corporate action is classified as 'mandatory with options'?

Which region uses the classification system of 'mandatory with options' for corporate actions?

What distinguishes a rights issue from other types of corporate actions?

'1:5' is an example of expressing which type of corporate action terms?

What does it mean when a company announces a '5:6' bonus issue according to the text?

What percentage of shareholders is generally required to vote in favor of a special resolution at a company meeting?

What voting threshold is needed for most matters put to shareholders as ordinary resolutions?

In what form can shareholders cast their votes without attending a company meeting in person?

Which term is used in the US to refer to the annual general meetings that public companies must hold?

What is the main purpose of annual general meetings (AGMs) for public companies?

What is the main difference between an ordinary resolution and a special resolution at a company meeting?

What is the main difference between a bonus issue and a stock split?

What distinguishes an open offer from a rights issue?

What motivates a company to do a reverse stock split?

Why might companies choose to offer bonus issues instead of cash dividends?

How does an open offer differ from a bonus issue?

What is the purpose of a stock split?

Why might a company prefer an open offer over a rights issue?

'Dividends are an example of a mandatory corporate action.' What does this mean?

'A stock split involves sub-dividing or splitting each share into a number of shares.' Why would a company choose to do this?

What is the term used for the lowest price at which existing shareholders can purchase additional shares in a rights issue?

If a shareholder chooses to do nothing following a rights issue, what will the company's advisers do with the shareholder's rights?

What term is given to the point at which shares and rights are traded as two separate instruments?

What does the premium refer to in the context of a rights issue?

What could be a consequence if a company sets the price of new shares too high in a rights issue?

What might be an outcome if investors view a company's expansion strategy favorably following a rights issue?

When does the theoretical ex-rights price come into effect in relation to a rights issue?

What could be a potential risk for an institution underwriting a share issue that fails to raise necessary funds?

What happens to dividends of cumulative preference shares if profits are insufficient in any given year?

What is the main difference between a takeover and a merger?

What happens to the price of shares on the ex-dividend date?

Why would problems occur if a trade made on Wednesday did not settle by Friday according to the text?

What is the significance of the record date in relation to dividends?

What distinguishes a hostile takeover from a friendly one?

Why do shares go ex-dividend before the dividend payment date?

In what way does a merger differ from a takeover when acquiring another company?

'Ex-dividend' means that buyers of shares are not entitled to which benefit?

'Cum-dividend' shares are those that entitle the purchaser to which benefit?

What is the process called when the custodian bank issues depositary receipts before the actual deposit of the underlying shares?

When GDR holders are not able to take up rights issues, what happens instead?

What is the percentage of a company's voting share capital that may be converted into depositary receipts?

In what currency are GDRs typically settled at on the LSE through Euroclear or DTCC Depository Bank?

How are voting rights exercised by GDR holders in the context of depositary receipts?

What happens to a pre-release of ADR when the underlying shares are delivered by the depository bank?

What is the process called when a company decides to seek a listing for its shares for the first time?

In which market are new shares in a company marketed to investors for the first time?

What is the purpose of primary markets in relation to raising capital?

What does the term 'listing' refer to in the context of stock exchanges?

What facilitates a two-way trade in issued securities by enabling investors to dispose of acquired shares?

In what way does a stock exchange contribute to market efficiency based on the text?

Which of the following is NOT an advantage of listing a company on a stock exchange?

What distinguishes American Depositary Receipts (ADRs) from Global Depositary Receipts (GDRs)?

What role does a depository bank play in the issuance of American Depositary Receipts (ADRs)?

What is a key benefit of using American Depositary Receipts (ADRs) for non-US companies?

What does 'bearer form' mean in the context of American Depositary Receipts (ADRs)?

How are dividends paid out to American Depositary Receipt (ADR) holders?

Why do non-US companies issue Global Depositary Receipts (GDRs) instead of American Depositary Receipts (ADRs)?

'Each ADR represents 0.2 individual Volkswagen shares.' What does this imply?

'ADRs give investors a simple, reliable and cost-efficient way to invest in other markets.' What aspect does this highlight?

What does it mean when an American Depositary Receipt (ADR) holder cancels the ADR and becomes the registered owner of the shares?

What is the primary role of market makers in quote-driven trading systems?

How have most stock exchanges evolved in terms of their trading methods?

In the context of stock exchanges, what does it mean for a company to be 'listed'?

What distinguishes quote-driven trading systems from order-driven trading systems?

Why is it important for stock exchanges to have their own rules and regulations for companies seeking a listing?

How do stock exchanges contribute to the overall market efficiency?

Which type of system does NASDAQ exemplify?

What is the purpose of market timing in equity indices?

How are buyers and sellers matched in order-driven systems?

Which type of indices takes into account the relative market capitalization of each stock in the index?

What is the term used to describe a stock with lots of orders waiting to be dealt on either side?

What is a key purpose of index tracker funds and exchange-traded funds (ETFs)?

Which trading facility emerged as a competitor to traditional exchanges?

Which type of indices assume an equal investment in each stock?

What do stock market indices provide for investors?

Why are free-float capitalization-weighted indices considered more accurate?

What distinguishes the DJIA from broader-based indices?

How is queue priority determined in order-driven systems?

Why do some equity indices exclude shareholdings held by large investors?

What role do multilateral trading facilities (MTFs) play in trading?

What is the main difference between holding shares in registered form and bearer form?

What is the primary reason bearer shares are regarded unfavorably by regulatory authorities?

What is the key drawback of certificated settlement for share transfers?

What does the term 'clearing' refer to in the context of trading securities?

Why do most markets prefer dematerialized (demat) settlement over certificated settlement for shares?

In bilateral settlement, what risk is typically borne by each trading party against their counterparties?

What is one key advantage of having a central securities depository in modern markets?

Why are bearer shares often immobilized in depositories like Euroclear or local country registries?

What is the primary function of a central counterparty in clearing and settlement?

How does dematerialized (demat) settlement differ from certificated settlement?

What is the role of a central counterparty (CCP) in trades?

Which process allows buyers and sellers to remain anonymous to each other?

What is the main reason regulators promote the use of central counterparties (CCPs) in trades?

What is the final phase of the trading process according to the text?

In the delivery versus payment (DvP) method, what is required for the exchange to take place?

What mechanism is used for settlement involving changing electronic records of ownership?

When does settlement typically occur in European equity trades?

Why is settlement considered a crucial phase in trading?

How does the settlement system help ensure a successful trade settlement?