Cum. and ex. - terms used in capital market authority, Finance Basics

Cum. And Ex. - Terms Used in Capital Market Authority         

These prefixes are written in front of other words as like capital, rights and dividends to qualify them."Cum" is short for cumulative, which means "inclusive of".  "Ex" on another hand is short for excluding; such is the opposite of including.

During commerce these terms refer to rights of sellers and buyers of securities while these are sold before a dividend has been affected although after it has been declared. These terms are required with the fact that shares are sold and bought throughout the year, however companies just declare dividends after the ending of their financial year when profits can be determined, and payment of dividends may obtain place long after moreover they have been declared.

Ex Rights cum Rights: The Term "Rights" refers to the decision via the directors to raise new share capital on current market rates however to provide a prior option to existing shareholders to purchase a fixed number of shares at preferential rates beneath market values. Ex and Cum proceeding it refers to the sale of shares decision, however before the dividend.

Thus "Ex Capital" infers such the seller of shares has sold them excluding their right to get a bonus share issue that has been declared at the time of sale. "Cum Capital" then so he sells them inclusive of its right. Cum Dividend: These terms simply mean that the sellers of shares retain his right to getting the dividend on the shares he sells although the title to the shares has passed to the buyer reserve:

P.S. "Cum" anything shares provide the buyer above par value since his purchase comes inclusive of the rights to collect upon prior earnings.  Therefore they are sold at higher prices than "Ex" shares.

Posted Date: 2/1/2013 1:49:27 AM | Location : United States







Related Discussions:- Cum. and ex. - terms used in capital market authority, Assignment Help, Ask Question on Cum. and ex. - terms used in capital market authority, Get Answer, Expert's Help, Cum. and ex. - terms used in capital market authority Discussions

Write discussion on Cum. and ex. - terms used in capital market authority
Your posts are moderated
Related Questions
Define the term - Right Issues If an existing company intends to raise extra funds, it can do so by borrowing or b issuing new shares. One of the most general methods for a

Bases of Share Valuation Share valuation can be done on the basis of income and asset values. On the basis of income still a share will be entitled to two forms of income. For

expression of underlying asset''s price at maturity T for lookback option.

Accept or Reject Rule of NPV Under this method, a company should accept an investment venture if N.P.V. is positive that is if present value of cash outflows exceeds such of c

Ask lajgkjasbgksabgbaskjbaskjbasjgbhjabgjbjgbskjgbkasbgjkabksgbksbgkabkhvakkvbaoygfyabkbkkye#Minimum 100 words accepted#

Financial Intermediaries These are institutions that link or mediate between the investors and savers: Some examples of financial intermediaries are as follow: 1. Comme

After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.

1. Find the price of the following bonds. They are all risk-free, and the risk-free rate is 10%. (a) A fifteen-year zero coupon bond with face value $1,000. (b) A three year

Trading Mechanism 1. An investor approaches brokers who obtain his bid or prefer to the trading floor. 2. At the trading floor, the selling and buying brokers meet and sea