Floatation of new shares, Finance Basics

Assignment Help:

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.

Note

  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.

Related Discussions:- Floatation of new shares

Advantages and disadvantage of profitability index, Advantages and Disadvan...

Advantages and Disadvantage of Profitability Index Advantages of profitability index a) Simple to understand and utilize. b) The part of NPV in the venture will show t

The constant growth model, You have the following information for Stardusts...

You have the following information for Stardusts: Current EPS is $1.79.  The current dividend is $.68 per share.  The return on equity is 24%.  The present price is $49.22. a.

Term structure of interest rates, Term Structure of Interest Rates The...

Term Structure of Interest Rates The term structure of interest rate give details the relationship between the term to maturity and interest rates and the differences between

estimate the price of the bond, Stardusts has 1 debt issue outstanding.  T...

Stardusts has 1 debt issue outstanding.  The debt matures on August 15, 2017, and has a 6.25% coupon.  Coupons are paid semiannually.  The bond is priced to yield 1.61% compound se

Shareholders and management, Shareholders and Management There is near...

Shareholders and Management There is near separation of ownership and management of the firm. Landlord employs professionals as managers who such have technical skills. Manage

Advantage of joint stock companies, Advantage of Joint Stock Companies ...

Advantage of Joint Stock Companies The company can own assets and incur liabilities on its own accord. Perpetual existence as or going to relate that allows the compan

Important points for capital market authority, Important Points for Capital...

Important Points for Capital Market Authority Apart from the above roles, CMA can assume the given steps to encourage progress of stock exchanges in US or other countries.

Calculate the total increment prize, Prudence buys a bond in EUR when it is...

Prudence buys a bond in EUR when it issued by the French government and inflation linked.  It offers a 2% yearly coupon.  She holds it for five years.             Par value: EUR

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd