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Equity/Share Markets
Where equity instruments are being traded A formal exchange facilitating the issue, buying and selling of equity securities Provide long term sources of funds Equity is available to
Finance infrastructure eg building and equipment Provides creditor confidence inn dealing with the firm Ensure availability of funds to absorb abnormal looses Improve liquidity of the business
Ordinary share
The principal form of equity issued by a corporation, which bestows a claim to residual cash flows and ownership and voting rights
Stock Exchange
Functions: Establishment of markets in a range of financial securities Provision of securities trading system Operation of a clearance and settlement system Provision of well informed market to secure the confidence of all participants
Rights issue
Issue of additional shares to existing shareholders on a prorata basis
Placements
Issue of new shares to selected institutional investors
Regulatory role...
The aim of regulation is to ensure market participants have confidence in the integrity of market operations Ensures listed companies meet specified limited levels of performance and standards of information disclosure so investors can make informed decisions
Continuous disclosure
Use of funds
Startups, business expansion, recovery finance for distressed companies, management buyouts Aim is generally to:
improve profitability sufficiently to realise value though an Initial Public Offering (IPO) break up business to achieve return on investment