10. Государственные ценные бумаги, акции частных компаний.

2 ways to raise capital: By selling shares to investors, investors become part-owners of the public li­mited company in question. By obtaining loans from investors, in the form of government stocks and debentures (долговые). se­curities- shares and loans collectively

Gov stocks or bonds (долговые ценные бумаги или облигации)= gilt edge securities= gilts.

Loans to the gov, can be bought at Post Office or through banks or stock exchange, fixed high rate of interest, repaid after a certain number of years o undated, absolutely safe (gov is not likely to go bankrupted), yields are high, but they don’t provide protection against inflation.

Local authorities bonds (местная облигация)

Issued by city, town or country councils when they need more income. Fixed rate of interest (higher than gilts have). Repayable after a number of years (fixed date), but shorter period than gilts. Sold on the Stock Exchange or directly to the public through the local authorities own finance departm. Secure.

Company shares can be bought when: 1- a firm starts trading or issues more shares, 2- other investors are selling their shares. Can be: debentures, preference shares, cumulative shares, deferred shares, ordinary shares, blue chips shares.

Ordinary shares = equities. bear the largest part of the risk, Ordinary shareholders are entitled to one vote per share, which gives them the right to take part in running the company-control of the business; not fixed rate, but the amount of dividend they receive (if any) is determined by the directors depending on how much profit has been made. but if company is doing well, returns can be much higher than with other forms of invest­ment. Paid after preference shareholders.

Preference shares -fixed dividend which must be paid before the ordinary shareholders (but after debenture holders), which gua­rantees a return on investment as long as the company is making a profit. if the company doesn't make a profit, the prefe­rence shareholder will not be paid his dividend either. No voting rights on the meetings. Little control over the company.

Cumulative preference shares - class of preference share which offers a safer return on investment. if the company cannot pay the dividend one year, the out­standing amount is carried over to the following years. the shareholder can expect to receive it one or more years later along with the divi­dend from the following years.

Convertible preference shares -this is another type of preference share which pays a fixed rate of interest until a certain time. After this time, it is converted into an ordinary share on which the holder receives a dividend rather than interest.

Deferred shares = founders shares второочередные- paid last of all, have the strongest voting rights, held by the people who run the company, they can have control over the firm and its directors, very unusual form today. Comtol is more important than dividends.

Blue chip share – shares in well-known comp-s, a share in a well-managed company with a large amount of paid up capital оплаченный and a long record of paying profits to shareholders during good and bad economic conditions. Reliable and efficient.

Debentures- direct loans made to joint-stock companies; carry fixed interest, debenture holders are not mem­bers of the company, do not share the members' risks, they receive a regular income from their investment(the company makes profit or not, assets may have to be sold to repair them) and take precedence over the sharehol­ders if the company is liquidated. Are paid before shareholders (preference).

Unit Trusts(паевые инвест фонды) – organizations that enable people with limited savings and little financial knowledge to invest in а wide range of stocks and shares without paying high Stock Exchаnge charges. The Trust managers offer Units for sale direct to the public: with the money received they buy shares in many companies and/or Government stocks. Остальное на всякий случай:

Secured (mortgage debentures) If a company cannot repay the loans debentures or pay the interest, the holders of secured debentures are automati­cally entitled to payment from the company's assets. Unsecured (naked debentures) Holders are not automatically repaid from the com­pany's assets if the company is un­able to pay in the usual way. can go to court to recover their money, but are not treated dif­ferently from the shareholders. An unsecured debenture is just a promise to repay a loan. Registered -The holders of registered debentures are listed in a company register. These debentures can only be trans­ferred in accordance with certain terms and conditions, and every transfer must likewise be entered into the register. The company can refuse a transfer, the person to whom the debenture was to be transferred can appeal against the decision. Bearer (unregistered) - debenture which can be nego­tiated by just handing it over to the new holder. Redeemable срочные are repaid debentures on a fixed date or within a certain period, often at a higher price than the issue price. Irredeemable There is no fixed date for payment of irredeemable deben­tures; the loan is only repaid when the company is liquidated. holders of irredeemable deben­tures may ask the company to re­deem them if it fails to keep up its interest payments. Convertible -can be ex-debentures changed for ordinary shares.