Equity Markets

What are dividends?

• Periodic cash payments distributed to shareholders

• Both common and preferred shareholders can recieve dividends, but a firm must pay preferred shareholders first before common shareholders can be paid

What are stock splits?

• Stock splits divide a company’s shres into fractions, usually of equal value

• Done when the company’s stock price increases significantly, ensuring that a compnay’s shares remain affordavle and therefore liquid

• Alternatively, when stock prices drop steeply to become penny stocks, firms will undergo a reverse stock split to stem volatility

What is a stock buyback/share repurchase?

• Stock buybacks are another way for companies to return money to its shareholders by buying back stock in the secondary market

• Normal Couse Issuer Bid (NCIB)

• Substantial Issuer Bids

What are Normal Course Issuer Bids (NCIB)?

• Refers to a company’s intention of buying back its own outstanding shares from the markets

• It is subject to regulatory approval

• The buying is ususally spread over an extended period of time

• It is often the case that companies do not carry through on their stated intentions in terms of the amount they intend to buy

What are Substantial Issuer Bids?

What is a stock?

What does equity mean?