|
|
Capital shares |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Capital sharesOne of two types of shares in a dual-purpose investment company, which entitle the holder to the appreciation or depreciation in the value of a portfolio, as well as the gains from trading in the portfolio. Antithesis of income shares.Capital sharesShares which entitle the holder to receive the capital appreciation from a split capital investment trust. The other type of shares in such a fund are income shares which receive the fund's income.Similar MatchesVenture capital limited partnershipVenture capital limited partnershipA partnership between a startup company and a brokerage firm or entrepreneurial company that provides capital for the new business in return for stock in the company and a share of the profits. Market capitalisationMarket capitalisationThe market value of a quoted company which is calculated by multiplying its current share price by the number of shares in issue.e.g. Company A has 120 million shares in issue. The current market price is 96p. The market capitalisation is a shade over £115 million.The share prices of companies on the Official List of the London Stock Exchange move constantly in response to supply and demand, and as they move, so do market capitalisations. You can see what the market caps of these companies are by looking at the columns of prices in the financial press every day, or on websites.Of course, market caps calculated in this way do not necessarily reflect the actual market value of companies, as is shown when one company launches a takeover bid for another and (as frequently happens) pays a premium over the pre-bid price.Market caps are important for another reason, which is that some of the most important indices (especially the FTSE 100 and FTSE Mid 250) are based on them. Not only that - tracker funds make their investments on the basis of indices. Working capitalWorking capitalDefined as the difference between current assets and current liabilities (excluding short-term debt). Current assets may or may not include cash and cash equivalents, depending on the company. Risk based capital ratioRisk based capital ratioBank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. Capital gains taxCapital gains taxCapital gains tax arises as a result of a 'chargeable event' - in the case of stock market investment, the disposal of shares at a profit.Just because you make a capital gain does not mean you necessarily have to pay tax on the gain. It all depends on your personal tax position, and on whether your total gains for the year are within the annual exemptions. The annual exemption per spouse in the tax year 2002-2003 is £7,700, rising to £7,900 for the 2003-2004 tax year.The gain you make beyond your annual exemption is added to any other income you may have and taxed as additional income at your marginal rate, be it 20% or 40%.Whatever the eventual tax position, it is important to keep records that enable you to calculate the gain on the sale of an asset, and ideally your record-keeping should be in a form that lends itself to completing your Tax Return.The essential information you need for each asset is:Base or original costDate of acquisitionDate of disposalDisposal proceedsWhen you have this information you are in a position to take advantage of indexation, taper relief, losses and your annual exemption. Further SuggestionsCrony capitalismWorking capital management Cost of capital Capital-saving Balance on capital account Capital Gains Capital turnover share capital Capital loss Capital control Capital rationing Venture Capital Long-term capital Complete capital market overcapitalised Capital intensity Portfolio capital Morgan Stanley Capital International World Index Capital allocation decision Working capital ratio Capital depreciation Capital flight Capital capital employed Capital appreciation fund |
|
|
|