Types
of Shares - Share Dealing
About Types of Shares
Zero
dividend preference shares (Zeros)
A zero has a target redemption value to be paid to shareholders
on a set date in the future, as long as the Split has enough money;
this redemption value is not guaranteed. In other words, the maximum
redemption value is fixed but is paid only if stock market performance
has been good enough. No dividends are paid to holders of Zeros.
Income
Shares
Income shares pay dividends. That is, their holders share all the
distributable income received by the Split (after any interest on
borrowings) but Income Shares do not have any target level of return
at redemption. The rate at which dividends are paid depends on investment
performance.
Capital
Shares
Capital shares do not pay an income or have a target redemption
value. Their value will depend on how much money remains in the
company after Zeros and Income shares have been redeemed and any
borrowings repaid. (If there is insufficient money to pay the target
redemption value to holders of Zeros, holders of Capital shares
will receive nothing.)
© Financial
Services Authority
List
of Online Share Dealers
OCIS
provide general financial information, we urge you to consult an
Independent
Financial Adviser ( IFA )
before making any important decisions about your finances. |
