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

Assignment Help:

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.


Related Discussions:- Cum. and ex. - terms used in capital market authority

Percentage of sales method - financial forecasting, Percentage of Sales Met...

Percentage of Sales Method - Financial Forecasting This method includes expressing various balance sheet items such are directly concerned to sales as a percentage of sales.

What is the objectives of listing, What is the Objectives of Listing ...

What is the Objectives of Listing Objectives of listing are mainly to: (i) Provide liquidity to securities. (ii) Mobilize savings for economic growth. (iii) Protect

Advantages of bonus matter, Advantages of Bonus Matter a) Tax advanta...

Advantages of Bonus Matter a) Tax advantages         Shareholders can sell new shares, and create cash in form of capital gains such is tax exempt unlike cash dividends wh

Explain the meaning of gross and net yield, Explain the meaning of Gross an...

Explain the meaning of Gross and Net Yield While gross yield refers to the yield realized by investor before paying taxes, net yield is what remains with him after paying th

Source of finance for the sole proprietor, Source of Finance for the Sole P...

Source of Finance for the Sole Proprietor Some sources of capital---Discuss a) Savings b) Assistance from friends or relatives c) Proceeds from sale of assets d) Ba

Important points for shareholders and creditors, Important Points for Share...

Important Points for Shareholders and Creditors 1. In raising capital, the borrowing firm will constantly question the financial securities in form of preference shares

Determine tax cash flows & irr, An industrial engineer proposed the purchas...

An industrial engineer proposed the purchase of a RFID Fixed Asset Tracking System for the company's warehouse and weave rooms.  The engineer though that the system would provide a

Explain the term - giving margin money to broker, Explain the Giving Margi...

Explain the Giving Margin Money to Broker Marin  is  the  amount  of  money  which is provided  by customer to the brokers who have agreed to trade their securities. It may

Prepare a cash flow statement , Q1.  A local delivery company has purchased...

Q1.  A local delivery company has purchased a delivery truck for $15,000.  The truck will be depreciated under MACRS as a five year property.  The trucks market value (salvage valu

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