Stock typically takes the form of shares of either common stock or preferred stock. As a unit of ownership, common stock typically carries voting rights that can be exercised in corporate decisions. Preferred stock differs from common stock in that it typically does not carry voting rights but is legally entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders.
Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Shares of such stock are called 'convertible preferred shares' or 'convertible preference shares' in the UK.
New equity issues may have specific legal clauses attached that differentiate them from previous issues of the issuer. Some shares of common stock may be issued without the typical voting rights or some shares may have special rights unique to them and issued only to certain parties. Often, new issues that have not been registered with a securities governing body may be restricted from resale for certain periods of time.
Preferred stock may be hybrid by having the qualities of bonds of fixed returns and common stock voting rights. They also have preference in the payment of dividends over common stock and also have been given preference at the time of liquidation over common stock. They will also have other features of accumulation in dividend.
In order to calculate weighted common shares outstanding, firstly analysis is done about how long the common shares were outstanding during a specific year. After this each group of shares should be multiplied with the number of shares in each group. Then all the shares are added together to get the weighted average of common shares for the individual year.
Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Shares of such stock are called 'convertible preferred shares' or 'convertible preference shares' in the UK.
New equity issues may have specific legal clauses attached that differentiate them from previous issues of the issuer. Some shares of common stock may be issued without the typical voting rights or some shares may have special rights unique to them and issued only to certain parties. Often, new issues that have not been registered with a securities governing body may be restricted from resale for certain periods of time.
Preferred stock may be hybrid by having the qualities of bonds of fixed returns and common stock voting rights. They also have preference in the payment of dividends over common stock and also have been given preference at the time of liquidation over common stock. They will also have other features of accumulation in dividend.
In order to calculate weighted common shares outstanding, firstly analysis is done about how long the common shares were outstanding during a specific year. After this each group of shares should be multiplied with the number of shares in each group. Then all the shares are added together to get the weighted average of common shares for the individual year.
