Class Of Shares
Class Of Shares - it is a kind of listed company stock. The shares differ in the total sum of votes received by the shareholders. The share is an asset or non-property security. the owner of the shares is the shareholder (K. Degenhardt 2010, p. 303). There are two main classes of actions, class A and class B. There is also class C but it is less popular. There are two basic types of shares, ordinary (more popular and available on the market) and privileged (they do not have the right to vote) (F. Glasgow 2011, book IV).
Class A, class B, class C
In real life, many investors very often do not know the differences between classic actions or do not have a good choice to follow the choice of stock options. Very often they use the knowledge of other people, e.g. financial planner (Ch. Jones 2003, p. 78).
- Class A - are common stocks and each share is the same as others. This is one of the traditional type of class of shares "with a front-end sales charge". This stock is usually given to a management team. Thanks to this, control over the company remains in senior management. Owning class A of shares provides many benefits like dividend priority. Class A shares are not publicly sold and cannot be in public circulation (Ch. Jones 2003, p. 78). They are recommended for individual investors. Buying shares involves the payment of commissions, and in this class, they are lower than in others.
- Class B - this share may have more or fewer votes than class A of shares. Shares of this class usually have a smaller dividend priority than class A of shares(F. Glasgow 2011, chapter 10). Buying these shares does not involve additional fees, except for the sale price. Class B actions can be changed to Class A actions (only long-term shares), but the reverse is not possible (Ch. Jones 2003, p. 79).
- Class C - is very popular with investors. Class C also cancel most of the delayed redemption charges. Investors like them because they don't like to pay evident, the real cost for the investment of shares (F. Glasgow 2011, chapter 10).
There is three section of shares:
- Authorized shares - "are the maximum number of shares that a corporation's state charter allows it to issue". A large number of companies are approved to issue more shares than is required and in the future, they can multiply capital by issuing additional shares (B. Needles i in. 2010, p. 530).
- Issued shares - "shares are those that a corporation sells or otherwise transfer to stockholders". The shares are emitted by the owners in full (B. Needles i in. 2010, p. 530).
- Outstanding shares - "are shares that a corporation has issued and that are still in circulation". It is possible for the company to have more shares issued than are presently overdue (B. Needles i in. 2010, p. 530).
| Class Of Shares — recommended articles |
| Advantages of corporation — Warrant — Distribution In Kind — Redeemable shares — Unit trust — Investment fund — Depository bond — External sources of finance — Hybrid instrument |
References
- Degenhardt K. (2010), Companies Act 2006, BoD - Books on Demand
- Glasgow F. (2011), Small Business Finance All-in-One For Dummies, John Wiley & Sons
- Jones Ch. (2003), Mutual Funds: Your Money, Your Choice : Take Control Now and Build Wealth Wisely, FT Press
- Needles B., Powers M., Crosson S. (2010), Principles of Accounting, Cengage Learning
Author: Sandra Kaczara
