ownership interest in a company

cumulative preference shares

noncumulative preference shares

Participating preference shares

Non-participating preference shares

Convertible preference shares

designated party to vote on the shareholders’ behalf.

each share represents one vote

allows shareholders to direct their total voting rights to specific candidates,

issued primarily to institutional investors via non-public offerings, such as private placements

do not have “market determined” quoted prices

highly illiquid

require negotiations between investors in order to be traded

Venture capital : investments provide start-up capital to companies that are in the early stages of development and require additional capital for expansion

leveraged buyout (LBO): when a group of investors uses a large amount of debt topurchase all of the outstanding common shares of a publicly traded company.

management buyout (MBO): group of investors acquiring the company is primarily comprised of the company’s existing management

private investment in public equity: public company that needs capital quickly sells private equity to investors

buy and sell securities directly in foreign markets

allows the publicly listed shares of a foreign company to be traded on an exchange outside its domestic market

issued outside of the company’s home country and outside of the United States

depository bank that issues GDRs is generally located (or has branches) in the countries on whose exchanges the shares are traded.

US dollar-denominated security that trades like a common share on US exchanges.

enable foreign companies to raise capital from US investors.

common share that is traded on different stock exchanges around the world in different currencies.

price appreciation

change (or capital gain) and dividend income

The greater the uncertainty of its future cash flows, the greater the risk and the more variable or volatile the security’s price.

finance the company’s revenue-generating activities in order to increase its net income and maximize the wealth of its shareholders.

The difference between its total assets and total liabilities

Reflects the collective and differing expectations of investors concerning the amount

total amount of net income available to common shareholders generated by the total equity capital invested in the company.

cost associated with the capital that is raised.

Investors require a return on the funds they provide to the company