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Deep discount |
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Deep discountIn the context of a rights issue, the issue of shares at a price much lower than the current trading price.In most rights issues, the new shares are priced at 10-15 per cent below the current price which is thought to be enough to ensure that existing shareholders take up the rights and buy the new shares.With a deep discount rights issue, the discount can be anything up to 50%. In August 2000 the media company Pearson announced a £1.7bn rights issue to pay for a US acquisition and priced it at a substantial discount. The reasoning was that for a rights issue of this size, and in volatile markets, the discount was necessary to ensure its success. Also, the company is estimated to have saved about £27m in underwriting fees.Similar MatchesForward discountForward discountA currency trades at a forward discount when its forward price is lower than its spot price. Discount yieldDiscount yieldThe yield on a security purchased at a price below its face value. Discount InterestDiscount InterestInterest at a beginning of the loan. For example if you take out a one-year loan of $100 at a discount interest rate of 10%, you would receive $90 at the outset. Discounted in or by marketDiscounted in or by marketUnannounced information that is widely accepted or anticipated, and hence is already taken into account in the pricing of the security/ market (e.g., poor earnings). Discount windowDiscount windowFacility provided by the Fed enabling member banks to borrow reserves against collateral in the form of governments or other acceptable paper. Further SuggestionsDividend Discount Returndividend discount model Discount rate Discount Points discount Discount yield bond discount Discounted payback period rule Accrued discount Original Issue Discount securities (OIDS) Discounted basis Straight Discount Rediscount Documented discount notes Forward discount Dividend Discount Model (DDM) Discount broker Discounted cash flow (DCF) Accrued market discount discounted rate mortgage Discount bond Original issue discount debt (OID debt) Underwriters discount Stepped discount mortgage Bank discount basis |
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