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Financial Terms | |
Shareholder |
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Definition of ShareholderShareholderOwner of one or more shares of stock in a corporation.
Related Terms:Shareholder's EquityRepresents the total assets of a corporation less liabilities. Shareholder valueIncreasing the value of the business to its shareholders, achieved through a combination of Shareholders' equityThis is a company's total assets minus total liabilities. A company's net worth is the Shareholders' equityThe total amount of contributed capital and retained earnings; synonymous with stockholders' equity. Shareholders' EquityThe residual interest or owners' claims on the assets of a corporation Shareholders’ fundsThe capital invested in a business by the shareholders, including retained profits. Shareholders' letterA section of an annual report where one can find jargon-free discussions by ![]() Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Annual fund operating expensesFor investment companies, the management fee and "other expenses," Annual reportYearly record of a publicly held company's financial condition. It includes a description of the Annual reportA report issued to a company’s shareholders, creditors, and regulatory Antidilution ProvisionsA clause in a shareholders agreement preventing a company from issuing additional shares, without allowing the current shareholders the opportunity to participate in the offering to avoid dilution of their percentage ownership. Appraisal rightsA right of shareholders in a merger to demand the payment of a fair price for their shares, as Block votingA group of shareholders banding together to vote their shares in a single block. Buy/Sell AgreementThis is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement. CapitalThe shareholders’ investment in the business; the difference between the assets and liabilities Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Cost company arrangementArrangement whereby the shareholders of a project receive output free of Credit UnionCredit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. Credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation. Cumulative votingA system of voting for directors of a corporation in which shareholder's total number of cumulative votingVoting system in which all the votes one shareholder is allowed to cast can be cast for one candidate for the board of directors. Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided DistributionsPayments from fund or corporate cash flow. May include dividends from earnings, capital DividendA dividend is a portion of a company's profit paid to common and preferred shareholders. A stock DividendThe payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period. DividendA payment made to shareholders that is proportional to the number of shares dividendPeriodic cash distribution from the firm to its shareholders. DividendUnlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus. Dividend clienteleA group of shareholders who prefer that the firm follow a particular dividend policy. For dividend growth methoda method of computing the cost Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. DividendsProfits paid out to shareholders by a corporation. Dividends per shareAmount of cash paid to shareholders expressed as dollars per share. Earnings per ShareA measure of the earnings generated by a company on a per EquityFunds raised from shareholders. EquityThe net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably. equityThe net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities. Expense ratioThe percentage of the assets that were spent to run a mutual fund (as of the last annual financial riskRisk to shareholders resulting from the use of debt. Flow-through methodThe practice of reporting to shareholders using straight-line depreciation and GearingA measure of the extent of long-term debt in comparison with shareholders’ funds. Leverage clienteleA group of shareholders who, because of their personal leverage, seek to invest in LiquidationWhen a firm's business is terminated, assets are sold, proceeds pay creditors and any leftovers Long-term debt to equity ratioA capitalization ratio comparing long-term debt to shareholders' equity. Mangement's discussionA report from management to the shareholders that accompanies the firm's Net WorthThe difference between the total assets and total liabilities of a company. Note: The value of the preferred shares is deducted from the net worth because the preferred's are usually redeemed before any value is paid to the common shareholders. Normalizing methodThe practice of making a charge in the income account equivalent to the tax savings Oversubscription privilegeIn a rights issue, arrangement by which shareholders are given the right to apply Paid-up CapitalThat part of the issued capital of a company that has been paid up by the shareholders. Payment dateThe date on which each shareholder of record will be sent a check for the declared dividend. Performance sharesShares of stock given to managers on the basis of performance as measured by earnings Poison pillAnit-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the poison pillMeasure taken by a target firm to avoid acquisition; Preferred sharesPreferred shares give investors a fixed dividend from the company's earnings. And more Profit Margin RatioA measure of how much profit is earned on each dollar of sales. It ProxyDocument intended to provide shareholders with information necessary to vote in an informed manner Proxy contestA battle for the control of a firm in which the dissident group seeks, from the firm's other proxy contestTakeover attempt in which outsiders compete with management for shareholders’ votes. Also called proxy fight. Record date1) Date by which a shareholder must officially own shares in order to be entitled to a dividend. Record dateThe date used to decide which shareholders will receive the dividend. The owners of the shares at the end of this day are entitled to the dividend. Repurchase of stockDevice to pay cash to firm's shareholders that provides more preferable tax treatment Residual lossesLost wealth of the shareholders due to divergent behavior of the managers. Retained earningsA company’s accumulated earnings since its inception, less any distributions to shareholders. Return on capital employed (ROCE)The operating profit before interest and tax as a percentage of the total shareholders’ funds plus Return on Common Equity RatioA measure of the percentage return earned on the value of the Return on investment (ROI)The net profit after tax as a percentage of the shareholders’ investment in the business. Return on Total Assets RatioA measure of the percentage return earned on the value of the Reverse stock splitA proportionate decrease in the number of shares, but not the value of shares of stock RightA short-lived (typically less than 90 days) call option for purchasing additional stock in a firm, issued Rights offeringIssuance of "rights" to current shareholders allowing them to purchase additional shares, Set of contracts perspectiveView of corporation as a set of contracting relationships, among individuals sole proprietorSole owner of a business which has no partners and no shareholders. The proprietor is personally liable for all the firm’s obligations. StockUnits of ownership, also called shares, in a public corporation. Owners of such units, called shareholders, share in the earnings of the company through dividends. The price of a stock is determined by supply and demand in the stock market. Stock dividendPayment of a corporate dividend in the form of stock rather than cash. The stock dividend stock repurchaseFirm buys back stock from its shareholders. Stockholders' equityThe total amount of contributed capital and retained earnings; synonymous with shareholders’ equity. Straight votingA shareholder may cast all of his votes for each candidate for the board of directors. strategic resource managementorganizational planning for the deployment of resources to create value for customers and shareholders; key varibles in the process include the management of information and the management of change in response to threats and opportunities Subscription pricePrice that the existing shareholders are allowed to pay for a share of stock in a rights offering. SupermajorityProvision in a company's charter requiring a majority of, say, 80% of shareholders to approve TakeoverGeneral term referring to transfer of control of a firm from one group of shareholder's to another Tax differential view ( of dividend policy)The view that shareholders prefer capital gains over dividends, Taxable acquisitionA merger or consolidation that is not a tax-fee acquisition. The selling shareholders are Tender offerGeneral offer made publicly and directly to a firm's shareholders to buy their stock at a price tender offerTakeover attempt in which outsiders directly offer to buy the stock of the firm’s shareholders. Total debt to equity ratioA capitalization ratio comparing current liabilities plus long-term debt to Transferable put rightAn option issued by the firm to its shareholders to sell the firm one share of its Two-tier tax systemA method of taxation in which the income going to shareholders is taxed twice. Unissued stockStock that has been authorized for use, but which has not yet been Value-based managementA variety of approaches that emphasize increasing shareholder value as the primary goal of every business. weighted average cost of capitala composite of the cost of the various sources of funds that comprise a firm’s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |