Floatation of new shares, Finance Basics

Floatation of New Shares

Rules for floatation of new shares

  1. The company must contain an issued share capital of at least Kshs.20 M.
  2. The company must contain complete profits throughout the last 3 years.
  3. At least 20 percent of issued capital or capital to be issued must be provided to the public
  4. The firm should issue a prospectus such will pride more information to investors to enable them to create informed judgment
  5. The market price of the companies share should be determined through the market forces of supply and demand.
  6. The company must be registered under Cap. 486 along with registrar of companies.


  1. A prospectus is a lawful document issued through a company wishing to increase funds from the public during issue of shares or bonds.
  2. It is prepared via directors of the company and submitted to NSE and CMA for approval
  3. The CMA has issued rules relating to the contents and design of the prospectus, as well to those enclosed in the Companies Act.

It must give details on like:

  1. Number of shares to be issued
  2. Offer or issue price per share
  3. The dates during that the other is open or valid
  4. Financial statements of the firm presetting EPS and DPS for the last five years
  5. Action report etc.
  6. Action may be in use against the directors whether the prospectus is fraudulent.
Posted Date: 2/1/2013 1:35:55 AM | Location : United States

Related Discussions:- Floatation of new shares, Assignment Help, Ask Question on Floatation of new shares, Get Answer, Expert's Help, Floatation of new shares Discussions

Write discussion on Floatation of new shares
Your posts are moderated
Related Questions
Advantage of Bill - Source of Finance Advantages of necessitating a Bill as a Source of Finance They are a faster means of raising finance whether drawer is credible.

what do you consider to be the main inbound logistics for banking

Enumerate about the Redemption Yield or Yield to Maturity (YTM) Redemption yield is indicated or promised rate of return an investor would receive from a bond purchased at t

Internal finance can avoid the agency costs of debt and equity finance. In practice it is the most important source of funding. (a) Discuss potential problems of internal financ

finance is divided into _____ and___________

Imagine Joy is the manager of a bank named Money Talks Bank of Virginia . This bank has recently issued new loans to customers. Joy wants you, the business analyst to prepare a re

How quickly could something like this be done? And how confidential is this? Has any student ever been caught using this service?

1. Each project has RM 10,000, and the cost of capital for each project is 12%. The projects' expected cash flows are as follows: Expected Net Cash Flows YEAR

Example of Dividend Basis Valuation Company Laxmi Synthetics pays a dividend of 10% on its Sh.60 par value ordinary shares.  This company uses a discount rate of 15%.  A