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One share one vote rule |
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One share one vote ruleThe principle that all shareholders should have equal voting rights in public companies and each shareholder should have one vote.One share one vote rule Similar MatchesShare capitalShare capitalThe proportion of a company's capital which derives from the issue of ordinary shares and preference shares. American Depository Share (ADS)American Depository Share (ADS)Foreign stock issued in the US and registered in the ADR system. Earnings per shareEarnings per shareEarning per Share (EPS) = Earnings / Number of Shares in IssueEPS is a key ratio used in share valuations. It shows how much of the company's profits, after tax, each shareholder owns.Example: Goodco makes a post-tax profit of £1.2 million. There are 20 million shares in issue. EPS = £0.6What starts out as an easy calculation gets complicated because the rules on what constitute earnings are fuzzy, especially when it comes to 'extraordinary' items:When an industrial manufacturer sells a large parcel of land to a developer should that profit be treated the same as the profits from its mainstream activities?If its profits one year are wiped out by an uninsurable natural disaster at its plant, should that event be regarded as just a normal cost of doing business?Until recently companies had discretion about how they treated one-offs. They could call an unusual profit 'exceptional' and include it in their EPS, and call an unusual loss 'extraordinary' and exclude it from EPS. This made it very difficult for investors to gauge the true progress of the business.Various Financial Reporting Standards (FRS) have tried to regularise treatment of one-offs, but if anything have made analysis harder. Large companies now report EPS in different ways, and the challenge for investors is knowing what basis has been used. When newspapers report EPS they use 'adjusted' EPS (also known as 'headline earnings') which strips out all profits/losses attributable to non-core activities. Paired sharesPaired sharesStock of two companies under the same management that are sold as one unit with one certificate. Identified sharesIdentified sharesStock or mutual fund whose purchase date and price may be identified for capital gains and tax purposes when shares sold. Further SuggestionsShared appreciation mortgageShareholders letter Market penetration or share redeemable preference shares Book value per share Shares share exchange Primary earnings per (common) share recovery shares preference shares Common shares stepped preference shares Control share Acquisition Laws income shares guilder shares (New York Shares) Cash flow per common share participating preference shares share account Share repurchase shared appreciation mortgage Equal shares swap ordinary shares Performance shares FT Ordinary Share Index (FT 30 Index) issued share capital |
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