Understand the various means used by companies to raise finance including shares, debentures, loans, options, and warrants, and the important distinctions and regulations that govern them.
The Capital Purchase Program (CPP) was an initiative under the Troubled Asset Relief Program (TARP) to stabilize the financial system by reinforcing the solvency of major banks through purchasing preferred stock and equity warrants.
Dilution refers to the reduction in earnings per share (EPS) and book value per share that occurs when convertible securities, such as convertible bonds and preferred shares, or warrants and stock options, are converted into common stock.
An equity instrument is any financial instrument that signifies ownership interest in an entity, such as stocks, options, or warrants.
A Eurobond is a type of bond issued in a eurocurrency, and it plays a significant role in the international finance market by allowing issuers to raise capital efficiently across borders.
A figure showing earnings per common share after assuming the exercise of all outstanding warrants and stock options, and the conversion of convertible bonds and preferred stock, all potentially dilutive securities.
Fully Diluted Earnings Per Share (EPS) for a company that takes into account not only the number of shares in issue but also those that may be issued as a result of such factors as convertible loans, options, or warrants. International Accounting Standard 33 requires that diluted earnings per share be disclosed on the face of the profit and loss account as well as basic earnings per share. The US equivalent is primary earnings per share.
Stock rights, also known as subscription rights or warrants, are financial instruments that give existing shareholders the right, but not the obligation, to purchase additional shares of a company at a predetermined price before a specified expiration date.
Warrants are securities offering the owner the right to subscribe for the ordinary shares of a company at a fixed date and price, and are also used in warehousing as proof for deposited goods.
