dividends, bonus issues, subdivisions, consolidations, mergers and demergers, capital repayments, coupons, redemptions/maturities, delayed/defaulting securities, liquidation, re-denominations
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Scrip dividend
Mandatory event with options. New shares given in lieu of cash dividend. Requires AGM approval
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Scrip dividend (calculation of shares received)
Number of shares x cash dividend / scrip reference share price
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DRIP
(Dividend re-investment plans) cash dividend used to purchase shares in the market. Stamp duty is paid. There is no cash flow advantage to the company
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Bonus issue
Free issue of shares, share price will decline
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Subdivision or stock split
reducing the nominal value of a share and increasing the number issued
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Consolidation or reverse split
increasing the nominal value of a share and decreasing the number issues
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Book value
share price x number of shares
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Demerger AKA...
spin offs
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Acquisition cost
original x today / combined
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Capital repayments
company pays back part of its issued share capital, mainly vountary but a re-nominalisation is mandatory
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Actual/Actual
nominal value x coupon x actual days of accrual / actual days in period x number of interest periods in the year
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Actual/365
nominal value x coupon x actual days of accrual / 365
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Actual/360
nominal value x coupon x actual days of acrual / 360
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30/360
nominal value x coupon x days in period assuming 30 days in a month / 360
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Interest rate conventions further info
actual/actual is used in most government bonds, actual/365 is used for GBP bonds and JGB, actual/360 is used for US corporates, 30/360 is used for most eurobonds
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*********
with each cash flow of the bond, its coupon and final maturity are stripped out and trade separately, each becomes a zero coupon instrument
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Re-denomination
requires where a unit of currency has changed so instruments denomiated in the currency may need adjusting
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Japan
JASDEC, dividends usually paid within 3 months of record date, interest usually paid semi-annually
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Italy
Dividends 1 month before payment date, dividends paid annually within 1 month of AGM, interest paid semi-annually, Monti Titoli, peak seasons are April and July
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USA
interest fixed at issuance, dividends declared quaterly, paid as cash, ex-dat is 2 days before record date
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Other cards in this set
Card 2
Front
Mandatory event with options. New shares given in lieu of cash dividend. Requires AGM approval
Back
Scrip dividend
Card 3
Front
Number of shares x cash dividend / scrip reference share price
Back
Card 4
Front
(Dividend re-investment plans) cash dividend used to purchase shares in the market. Stamp duty is paid. There is no cash flow advantage to the company
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