A method of raising capital where a company sells new shares to an underwriter, who then resells them to the market.
Capital paid in excess of par value refers to the amount of money shareholders have invested in a company that exceeds the par value of the issued shares. This extra amount is often reflected on the equity section of the balance sheet and signifies additional capital that the company can use for growth and operations.
Debt financing is the process of raising capital through borrowing, typically via the issuance of bonds. It contrasts with equity financing, where capital is raised through the sale of ownership stakes in the company (stock).
Equity financing involves raising capital through the sale of shares in a company, providing stakeholders with ownership interests in contrast to accruing debt.
Equity Share Capital refers to the portion of a company's capital that is raised in exchange for shares, representing ownership stakes in the company. This differs from non-equity shares which may include debt or preferred stock.
Floating an issue refers to the process by which a company issues new securities to the public in order to raise capital. This process involves several steps, including registering the securities with regulatory bodies and underwriting the issue.
The overall cost of raising additional finance, reflecting the increased risks and required returns for equity and debt funders due to increased financing.
An Initial Public Offering (IPO) is a corporation's first sale of stock to the public. This event marks a pivotal moment for a company, transforming it from a private entity to a publicly traded company.
The process through which a private company offers its shares to the public for the first time, transforming into a publicly traded company.
Issued and outstanding shares are shares of a corporation that have been authorized in the corporate charter, issued, and are currently held by shareholders. These shares represent the capital invested by the firm's shareholders and owners.
Nominal capital, also referred to as authorized share capital, represents the maximum amount of share capital that a company is authorized to issue to shareholders as per its corporate charter.
Nominal share capital, also known as authorized share capital, is the maximum value of shares that a company can legally issue as stated in its corporate charter.
Ordinary share capital is the total share capital of a company consisting of ordinary shares, which entitles shareholders to a share in the company's profits and may include voting rights and other privileges.
Recapitalization involves altering the mix of debt and equity financing in a company without changing the total amount of capital.
Share premium is the amount payable for shares in a company that is issued by the company itself, in excess of their nominal value. The premium received must be credited to a share premium account, which is restricted in use and cannot be utilized for paying dividends to shareholders.
Subscribed share capital refers to that portion of the company's equity that investors have agreed to buy and for which they have committed to pay, though full payment may not yet have been made. It is a subset of the issued share capital.
Thin capitalization refers to an arrangement where a company is financed through a high level of debt compared to equity, typically involving intercompany loans within a multinational entity. This is often structured to gain tax advantages by exploiting interest payment deductions.
The weighted average cost of capital (WACC) represents a firm's average cost of capital from all sources, including both equity and debt, weighted by their respective usage in the firm's capital structure.
