Glossary

Ordinary shares

The most simple form of shares (most companies only have ordinary shares).

Geared ordinary shares

Shares that get a dividend and get what is left of the assets on a winding up. Also known as Ordinary income shares.

Ordinary income shares

Shares that get a dividend and get what is left of the assets on a winding up. Also known as Geared ordinary shares.

Zero dividend preference shares

Zero dividend preference shares (ZDP) are Shares that will be redeemed at a fixed price at some defined point in the future (provided that sufficient assets are available). Their entitlement to the assets of the company rises in a straight line between their entitlement on issue and their redemption value. They are not entitled to […]

Preference shares

Preference shares earn a preferred return, usually a fixed dividend, and usually also have a fixed entitlement on a winding up. They will usually get paid out before the ordinary shares on a winding up. Click here to subscribe for free equity research on investment trusts, funds and listed companies.

Redeemable shares

Shares designed to be bought back easily by a company (in practice, as rules around buy-backs have eased, Redeemable Shares are not much different to ordinary shares).

Core Capital

Core capital or Tier 1 capital is the reserves that a bank has to back its business activities. It composed of disclosed reserves and common stock/ordinary shares. It can also include non-cumulative, non-redeemable preferred stock. As well as core capital, banks also use instruments to accumulate Tier 1 capital, such as preference shares and CoCos. […]

C share

Companies often classify different classes (=types) of shares using letters. C share is used most commonly to describe a new class of shares issued by an investment company. The C shares have their own portfolio while the money raised by issuing them is invested. When the Board judges that the C share portfolio is sufficiently […]

Subscription share

An instrument that gives the holder a right but not the obligation to buy ordinary shares at a pre-determined price (the strike price or exercise price) on a given date or within a range of dates. It is like a warrant but eligible for inclusion in an ISA

Strike price

The price at which an option, warrant or subscription share gives the right to buy an ordinary share also known as the exercise price

Exercise price

The price at which an option, warrant or subscription share gives the right to buy an ordinary share also known as the strike price

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Glossary

Ordinary shares