Calculation of dividends on preferred shares. The Constitutional Court upheld the right of a joint-stock company not to pay dividends on preferred shares. By form of payment

• Definition of a preferred share: purpose, benefits, features;
• What is the difference between a preferred share and a common share?
• Preferred share types and dividend accrual scheme.

What is a preferred share? This is a share that has certain privileges, i.e. advantages over other types of shares (ordinary) issued by the issuer, i.e. Joint-Stock Company. The owner of a special share does not have the right to vote at the general meeting of shareholders, but in return receives privileges - the ability to influence the fate of the company in the most important issues for it, incl. in case of reorganizations, liquidations, in addition, holders of such shares are entitled to stable dividend payments. In case of delay in dividends (for example, due to the difficult financial situation of the joint-stock company), they receive the right to vote. More details below

What are the benefits of such shares?

1. Payment of dividends . Dividends are actually the profit of the company, but not all, of course, but some of it. Dividends are calculated quite complicated and can have several methods of calculation - both fixed and floating interest.
2. The right to part of the property in the event of liquidation of the company . Here we must remember that the advantage is still to have the holders of bonds, which the company can also issue in large quantities.
3. Possibility of converting into ordinary shares . By default, the shares are perpetual, but the company can withdraw these shares or convert them to common stock.
4. Voting right . By default, preferred shares are non-voting, however, in the case of resolution of particularly important issues related to reorganization, restructuring, liquidation, changes in the charter, etc., the owners of such shares receive the right to vote. In addition, if for some reason, the company was unable to pay dividends, then the owners of preferred shares again receive the right to vote at the first meeting following the decision on non-payment of dividends.

What are preferred shares for?

To develop a business, any company needs capital, it is like air for living beings. He does not appear himself, so he is attracted from outside. If you do not consider the rare option of borrowing money from a bank (the bank will not be able to give a large amount), then there are such options as stocks and bonds.

Bonds are actually lending to an organization, because they pay a certain percentage. Also, in the event of liquidation, the bondholder has the right to demand payment of interest in court. The downside of bonds is that their holders in no way affect the life of the company, they cannot participate in the shareholders' meeting and make any decisions.

Shares - according to the charter of the company, its own capital, not borrowed. The company asks people (future shareholders of this company) to help support it financially in exchange for participation and ownership of shares. To do this, they came up with ordinary and preferred types of shares.

The company tries to maintain a balance between its own funds (shares of all types) and credit (bonds).

• Preferred shares, on the one hand, do not give the right to vote in resolving issues, but, on the other hand, in the absence of this voting right, they receive dividends.
• Holders of ordinary shares, on the contrary, can actively participate in the life of the company, but for this they are deprived of dividends (although sometimes they can pay, at the discretion of the company).
• Preferred shares issue no more than 25% of the total number of shares and they occupy approximately the middle position between ordinary shares and bonds.

Thus, the issue of preferred shares helps the company avoid excessive use of borrowed funds (bonds), and at the same time prevent excessive growth of voting shareholders (common shares).

What are preferred shares?

For interest payments:

Cumulative They allow you to earn interest. That is, if the company failed to pay dividends, then the owners of preferred shares do not receive voting rights, but are accumulated and paid out in subsequent years. The holders of such shares receive additional privileges for the payment of dividends in comparison with the holders of ordinary shares. It is considered a fairly profitable type of preferred shares if the company is just starting to emerge from the crisis, and in the future will be able to demonstrate a good financial result.

Non-cumulative - respectively, do not accumulate. In this case, the owner of the share receives the right to vote at the general meeting of shareholders.

On the basis of interest

Fixed interest - This fact was immediately clarified in the issue of the paper. On the one hand, it’s good, if suddenly the company’s business goes badly, dividends are still paid. On the other hand, if the company demonstrates outstanding financial results that would allow paying more dividends, but a fixed percentage does not allow this. This type of preferred stock carries risk for both companies and shareholders.
With the right to receive additional dividends . In this case, the lower threshold of dividends is indicated, which the company undertakes to pay, however, if dividends on ordinary shares are higher than this value, then a decision is made to pay additional dividends to the owner of such preferred shares.
Adjustable dividend rate – this type of preferred shares was created in order to reduce the risk of the company and shareholders, but at the same time reduces the potential income. The point here is to establish an interest rate corridor, for example, the minimum threshold is 5%, and the maximum is 10%. And dividend payments will be paid only within this corridor.
Auction type of dividend accrual . It was founded in 1985 and is based on the fact that buyers themselves, on the basis of an auction, determine the amount of dividends paid. It is considered to be the most popular type of preferred shares, as the income from them most accurately reflects the market situation. Among the disadvantages of this type of preferred shares is the potentially low liquidity.

Exchange possible

Convertible . The issue of preferred shares places a very serious responsibility on the company, because in fact, such shares are perpetual, and therefore, the company is obliged, in theory, to pay dividends indefinitely. This is rather all in theory, but in practice, companies, after a certain period, may decide to buy back such shares and convert them into ordinary shares. Such preferred shares are called convertible. All these transactions are previously notified to their holders.

non-convertible – such shares are not intended to be converted into ordinary shares

By the right of redemption by a joint-stock company

Revocable - as a rule, when issuing such shares, it can be stipulated that the company has the right to withdraw preferred shares after a certain period of time with a premium of 1%. The price for which the shares are redeemed can be calculated both at the nominal and at the market price. The right to redeem preferred shares is a kind of trump card in the sleeve, which allows you to reduce your potential risks and reduce dividend payments.

Irrevocable - shares that the company has no right to buy back.

The buyer of shares or, must understand that only certain types of securities will allow him to receive preferred dividends.

What it is

This is that part of the profit of the company, which is distributed exclusively among the owners of all preferred shares. holding this type of shares have some advantages over the owners of ordinary securities only. The right to receive preferred dividends implies:

• Payments in the first place, before the rest of the shareholders.
• The possibility (if it is enshrined in) to receive a fixed income that does not depend on profit.
• Fixed payment dates, quarterly or yearly. In accordance with the statute.
• Cumulative (cumulative) accrual system. That is, if the payment was not made within the established period, then it is transferred to the next date, and is added to the dividends of the next period.
• With its preferred shareholders should receive dividends before other categories.

But in the event of force majeure circumstances, the board of directors may suspend or cancel the payment of preferred dividends.

The owners of such shares have one more minus - they do not have the right to vote.

Preferred dividend payouts are different from regular dividends. Therefore, they are calculated separately. This is due to the fact that preferred dividend payments are accrued even in the absence of the required profit, and this procedure can be suspended only due to exceptional circumstances.

Formulas

When calculating the amount of payment of dividends on preferred types of shares, the following are important:

• The rate of return on one security, expressed as an interest rate i.
• Number of shares submitted for payment (issued) Nprev.
• The amount of dividends on the 1st share I.

The calculation is carried out according to the formulas:

• The amount of payments for the 1st preferred share: I=i×Pnom.
• The total amount of payments for this type of shares: ΣI=I×Nadv.

Example

Initial data for calculations:

• The rate of return on one security i is 7%.
• The nominal value of Pnom is 75 rubles.
• Total number of preferred shares Npriv - 80,000 pcs.

Payments for one share = i × Pnom = 0.07 × 25 = 5.25 rubles. For all shares, the company will pay: I × Npriv = 1.75 × 80,000 = 420,000 rubles.

The types of preferred shares are described in this video:

How is the payout

The owner of this type of securities has a guaranteed right to receive income from the company's activities. He receives this right in return for his refusal to participate in the management of the JSC. Such a provision is enshrined in law. The 32nd Federal Law on JSCs requires that the amount of the dividend be reflected in the charter of the company. To do this, choose one of the following methods:

• In the form of a specific specific amount in rubles.
• As a percentage of the declared par value of the share.
• in the manner prescribed by the statute.

Unlike ordinary shares, the payment order for preferred securities is not determined by

I am a shareholder of the company. I have both common and preferred shares. The JSC Board of Directors approved the regulation on dividend policy. Among other things, it provides that in the absence of net profit, dividends on preferred shares are paid out of the special fund formed for these purposes. An extraordinary general meeting of shareholders decided to allocate a part of the funds of this fund transferred to it in previous periods to pay dividends on preferred shares of the company. I believe that these decisions, in fact, are aimed at depriving the voting rights of the owners of preferred shares in the absence of profits for JSCs. Can I challenge them, given that I voted against at the general meeting?

The decisions made are unlikely to be challenged.

According to paragraph 6 of Art. 68 of the Federal Law of December 26, 1995 No. 208-FZ “On Joint Stock Companies” (hereinafter referred to as the JSC Law), a shareholder has the right to appeal to the court a decision of the board of directors (supervisory board) of a company taken in violation of the requirements of this law, other regulatory legal acts of the Russian Federation, the charter of the company, if the said decision violates the rights and (or) legitimate interests of the company or this shareholder. The court, taking into account all the circumstances of the case, has the right to uphold the contested decision, if it did not cause losses to the company or the shareholder or the occurrence of other adverse consequences for them and the committed violations are not significant.

In accordance with paragraph 1 of Art. 65 of the JSC Law, the competence of the board of directors (supervisory board) of the company includes resolving issues of general management of the company's activities, with the exception of issues referred by the said law to the competence of the general meeting of shareholders.

According to paragraphs 12 and 13 of Art. 65 of the JSC Law, the competence of the board of directors of a joint-stock company also includes the use of the reserve fund and other funds, as well as the approval of internal documents of the company.

Thus, in the situation described, the board of directors, when adopting the regulation, acted within its competence.

According to paragraph 2 of Art. 42 of the JSC Law, the source of payment of dividends is the profit of the company after taxation (net profit of the company). Dividends on preferred shares of certain types may also be paid from special funds of the company previously formed for these purposes.

Within the meaning of this provision, a special fund is intended for the payment of dividends on preferred shares in the absence of a company's net profit. It is formed from the balance of retained earnings of previous years. However, it does not have to be specifically specified in the charter of the company.

By virtue of paragraph 1 of Art. 32 of the JSC Law, shareholders - owners of preferred shares of the company do not have the right to vote at the general meeting of shareholders, unless otherwise provided by the specified law. An exception in this case is the situation when the annual general meeting of shareholders, regardless of the reasons, did not decide on the payment of dividends, or a decision was made on the incomplete payment of dividends, or a decision was made on the incomplete payment of dividends on preferred shares of this type (clause 5 of Art. 32 of the JSC Law). The statutory list of cases in which holders of preference shares are given the opportunity to vote at general meetings of shareholders is exhaustive.

Preferred shares, by their legal nature, are intended to generate profit for the owner of the shares from the activities of the joint-stock company. The management of a joint-stock company is the prerogative of the owners of ordinary shares. Thus, the interest of the owner of preferred shares cannot be directed to refusing to receive income when there is a possibility of extracting it.

The purpose of granting voting rights to holders of preferred shares in accordance with the JSC Law is to enable them to exercise control over the financial and economic activities of the company, as well as to ensure the possibility of restoring their right to receive dividends by participating in the voting of the general meeting of shareholders on the issue of payment of dividends. In other words, we are talking about the ability to prevent the actions of the owners of ordinary shares of the company from making an unreasonable decision on non-payment of dividends on preferred shares.

The rule of the dividend provision that you dispute provides, in fact, an additional guarantee for the exercise of the rights of holders of preferred shares. In this connection, it cannot be considered as violating the rights of the applicant, who is the owner of preferred shares, for which a decision was made to pay dividends.

In addition, the decision to pay dividends to preferred shareholders from a special fund is not the right of preferred shareholders, but of a company that, in the absence of a net profit, has the right to decide at its own discretion whether to pay dividends to preferred shareholders or not.

At the same time, it should be noted that the current legislation does not contain restrictions on the possibility of paying dividends on preferred shares at the expense of retained earnings of previous years.

Thus, the paragraph of the provision under consideration does not change, does not reduce or restrict the rights of shareholders - owners of preferred shares, but only creates an additional guarantee that they will realize their interest in receiving dividends. The court in the event of a dispute is unlikely to satisfy your requirements for its invalidation. The situation is exactly the same with the decision of the general meeting of shareholders to direct part of the company's retained earnings to the formation of a special fund, and then to pay the funds of this fund to owners of preferred shares as dividends.

According to paragraph 7 of Art. 49 of the JSC Law, a shareholder has the right to appeal to the court a decision taken by the general meeting of shareholders in violation of the requirements of the said law, other legal acts of the Russian Federation, the charter of the company, if he did not participate in the general meeting of shareholders or voted against such a decision and the said decision violated his rights and legitimate interests.

The claim for recognizing the decision of the general meeting as invalid is subject to satisfaction if the committed violations of the requirements of the law, other legal acts or the charter of the company infringe the rights and legitimate interests of the shareholder who voted against this decision or did not participate in the general meeting of shareholders.

The purpose of the defendant's creation of a special fund is to create conditions for exercising the right of holders of preferred shares to receive dividends, which in itself excludes the possibility of considering the formation of this fund as a form of violation of the rights of holders of preferred shares. The decision of the general meeting of shareholders does not change, does not reduce or restrict the rights of shareholders - owners of preferred shares, but, on the contrary, creates an additional guarantee for the realization of their interest in receiving dividends.

The growth of inflation, which the Central Bank cannot yet stop, a string of revocations of licenses from commercial banks, the instability of precious metals quotes are forcing Russians to look for alternative methods of investment. People who have a sufficient level of financial literacy and are familiar with at least basic financial instruments are increasingly choosing to purchase dividend shares. We will briefly talk about what dividends are and how dividends are paid on shares in Russian companies.

What are share dividends

The definition of the concept of "dividends" is given in Art. 43 of the Tax Code of the Russian Federation. Dividends mean any income received by a shareholder (investor) from a company in the distribution of profit remaining after tax (including interest on preferred shares) on shares owned by the shareholder, in proportion to the shareholders' shares in the authorized capital of this company.

Preferred shares differ from ordinary shares in that they pay a conditionally fixed dividend, the amount of which is specified in the company's charter (for example, it can be 10% of profit or 5% of the nominal value of shares). Preferred shares do not carry voting rights in the election of directors and boards of directors. The law states that dividends on preferred shares cannot be less than dividends on ordinary shares. The amount of income payable on preferred shares is deducted from the total amount of dividends. To find out how much an investor will receive for one ordinary share, it is necessary to divide the resulting difference by the number of ordinary shares.

How dividends are paid in Russian companies

To receive dividends on shares of Russian companies, you need to be well versed in the following dates:

• The ex-dividend date is the date on which the company's shares must be held in order to receive dividends. Since 2014, this "cut-off" date cannot be set before the decision to pay dividends was made, that is, before the annual general meeting of shareholders. Remember that according to the T+2 trading regime that has been in effect in Russia since September 2013, there is a deadline by which you need to buy shares in order to get into the register for dividends - no later than 2 days before the closing date of the register.
• The date of the decision to pay dividends is approved by the annual general meeting of shareholders on the basis of proposals from the board of directors.
• The date of the annual general meeting of shareholders - comes after the date of closing the register for participation in the annual meeting (set by the board of directors), but before the closing of the register for dividends.
• The date of closing the register for dividends is the final date of compiling the register of persons who are entitled to receive dividends. Since 2014, it has been approved by the meeting of shareholders based on the recommendations of the board of directors and must occur no later than 20 days and no earlier than 10 days after the meeting of shareholders. Important: Dividends will be paid only to those people who were entered into the register 2 days before the date of its closing. You don't have to hold shares for a full year, though: you can buy a company's securities up to a month before the closing date of the register and still receive dividends.
• Date of payment of dividends - the date when the shareholder receives the dividends due to him (usually dividends are paid once a year). From 01.01.2014, the dividend payment period is set at 25 days from the ex-dividend date.

It should be noted that back in 2013, the process of determining some dates was significantly different from the one that is in force now. Ilya Balakirev, an analyst at UFS IC, emphasizes that now, at the time of the "cut-off" for dividends, the investor will know exactly the approved amount of dividends. Consequently, the risks of dividend strategies will be significantly reduced. The market will also be positively affected by the reduction of dividend payment terms (previously 60 days were allotted for this).

Also, the changes that came into force in 2014 will affect the usual way of working for many companies. If earlier almost all annual meetings of shareholders were held in June, and the registries were closed in May, therefore, it was in May that the stock market peaked, but now the situation will change. Now investors' interest in securities will increase in June-July and will subside after the cut-off date for dividends. For example, in the calendar of events of Gazprom, the general meeting of shareholders is scheduled for June 27, therefore, in order to receive dividends based on the results of the company's work over the past year, shares can be purchased in July.

In order to understand how to choose a company in which you will become an investor, and what income you can expect, it is important to understand the mechanism for forming the amount of dividends. More about this.

How the amount of dividends is determined

Relatively speaking, the company divides all the net profit received during the year into 2 parts: one is directed to the further development of the business, and the other is distributed among the shareholders in proportion to their shares. The decision on which part will be invested in the business and which part will be allocated to shareholders is made at the annual meeting of shareholders.

If the company "worked in the red", then the meeting of shareholders may decide to refuse to pay dividends. However, even if the profit is received, shareholders may be left without payments: if it is necessary to direct all funds for further business development, this goal will be a priority.

The shares of each company are valued by their dividend yield, which is defined as the ratio of the dividend per share to the market value of the security. In Russia, a good level of dividend yield is 5-10%.

Thus, it is easy to conclude that in order to obtain the maximum income at the minimum cost, it is important to choose the right company in which you will become a shareholder and acquire shares in time. How to do this - we will tell in the article -

22.01.2018

The profit of the enterprise can be used to replenish the authorized capital, develop production, pay bonuses to employees and other purposes provided for by the charter. In a joint-stock company, it can be distributed to pay dividends to shareholders.

factors associated with objective limitations:-

the level of taxation of dividends; -

the level of taxation of property of enterprises; -

achieved effect of financial leverage; -

the actual amount of profit received and the level of return on equity; 4)

In addition, future dividends are depreciated to the extent that they do not materially change the valuation of the shares. The current value of dividends during a period of high growth is shown in the table. The present values ​​of these dividends are then determined by discounting each dividend at the required rate of return compared to the number of compounding periods.

The formula for calculating the present value factor for discounting each dividend is. Adding the present value of dividends for the first four years to the present value of the final value gives an estimate of the value of the shares. Significant discrepancy between the values ​​obtained from the constant growth model and the two-stage model. Let's now take a closer look at the two different models to try to understand the elements that affect scores.

other factors: -

One of the difficult tasks of an analyst is to determine the level of profit of an enterprise. Earnings can be expressed as earnings per share (Earning per Share - EPS), which is needed in the evaluation of the value of ordinary shares, the evaluation of dividends and the possibility of paying them, as well as for other purposes.

Our examples used the historical long-term treasury rate, but the current long-term treasury rate of 7% is much lower than the historical average. Generally, a higher risk-free rate increases the required rate of return for a stock, resulting in a lower stock valuation.

In addition, beta plays a key role in valuation as it also affects the required rate of return. Companies with higher bets will have higher required rates of return and lower valuations, and companies with lower bets will have lower required rates of return and higher valuations.

Earnings per share is the most common indicator of profitability and is often taken into account in the process of making a decision to buy / sell shares in the stock market. When analyzing the financial condition, a lot of attention is always paid to earnings per share. This ratio is calculated by dividing the amount of net profit at the disposal of the owners of ordinary shares by the average number of ordinary shares outstanding for the reporting period.

It is difficult to accurately determine the required rate of return. The methodology used in these examples provides a good formula for estimating the required rate of return, but there are other approaches. A full discussion of the calculation of required rates of return is beyond the scope of this article.

A number of assumptions are made in the dividend discount model. First, the alleged dividend is considered paid by the company. If a dividend is not paid, a profit valuation model may be used. This formula requires an estimate of the long-term payout ratio, which means that there is a reasonable expectation that the company will start paying dividends in the future. If the expected rate of return or payout is zero, or if future intentions to start paying dividends cannot be reasonably predicted, the company cannot be valued using any formula.

Much attention is paid to the earnings per share indicator by the company's management and its shareholders. It is on the basis of the calculation of the EPS indicator that, to a large extent, the evaluation of shares takes place. This indicator is used in strategic planning to formulate specific goals and objectives. Usually the researcher does not have to calculate this ratio because companies publish it in their annual reports and make quarterly calculations.

Second, the dividend discount model works best if earnings and dividends grow at the same rate, so that the payout ratio remains stable. A company that increases its dividend faster than its earnings will eventually fail to pay its full dividend. On the other hand, a company that increases dividends much more slowly than earnings will accumulate too much money and cause the dividend discount model to underestimate its value.

As a rule, smaller companies in the high growth phase do not pay dividends, as most of the income is saved to fund expansion. Even some mature companies do not pay dividends and prefer to return cash to investors through share repurchases. Of course, these companies also cannot be valued using the discounted discount model.

Calculation of earnings per share (P) is made according to the formula:

PE - DPA _ Lsh, (8.9)

PE - the amount of net profit received in the analyzed period, UAH;

DPA - the amount of dividends paid in the analyzed period on preferred shares, UAH;

CPA - the average annual number of ordinary shares in circulation, pieces;

PPA - profit for owners of ordinary shares, UAH.

This indicator characterizes the investment attractiveness of the company - the more net profit falls on the hryvnia of investments, the more likely it is to attract investments through an additional issue of shares.

Net earnings per share may be converted to a cash basis. In this case, it is called the indicator of receipt of money per share. This is an approximate indicator, and it is calculated to determine the ability of the company to pay dividends in cash as a result of the main activity of the enterprise. An attempt is made to determine the cash flow per share. Non-monetary write-offs, such as depreciation of tangible and intangible assets, are added to net income, since these accounting transactions do not represent real cash flows. Thus, by adding back these accounting write-offs, we roughly determine how much cash income generates the profit received as a result of the company's main activities.

The use of this indicator can often mislead the analyst, since the calculation of cash flow is done very approximately according to the above assumptions. In accordance with the above assumptions, the calculation of the cash flow per share is made according to the formula:

P _ PPA + Am, (8.10)

where PDA is the indicator of cash receipts per share; PPA - profit for owners of ordinary shares, UAH;

CPA - the number of ordinary shares, pieces.

N _ YES; N _ YES

DN SAN ’ (8.11) and DF SAR ’ (8.12)

where NDN is the nominal rate of the dividend;

NDF - the actual rate of the dividend;

YES - dividend per share;

SAN - par value of one share;

SAR is the market value of one share.

The first indicator characterizes the investment attractiveness of the enterprise in the primary market, and the second - in the secondary securities market. Both of these indicators are related to the total return of the share, which is calculated taking into account the market value and the exchange rate difference that the owner will receive when selling the share.

The growth of the share price is an important characteristic of the enterprise's respectability in the eyes of the stock market. In addition to receiving current profits, investors usually expect an increase in the value of a company's ordinary shares on the stock market. The determining factor in the growth of the share price is the additional economic value, i.e., the provision in the long term of more significant cash flows compared to investments due to the production, investment and financial activities of the enterprise. When analyzing the performance of a given company, changes in the price of its shares will be compared with general trends in the securities market, with changes in the prices of shares of companies in this industry or a selected group of companies that are used for comparison. The change in the market price of a share characterizes the so-called capitalized income of the company, which is calculated by the formula:

KD _ SAR SAR, (8.13)

where CA is the company's capitalized income, UAH;

SNAR - market price of a share at the beginning of the year, UAH;

SCAR - market price of a share at the end of the year, UAH.

Dividend income is one of the components of the income of an investor - the owner of ordinary shares. To determine dividend income, the amount of annual dividends is compared with the current share price at the beginning of the year or the average share price. The announcement of dividends per share is made by the board of directors of the company, and this is given great attention, since the declared and expected dividends on the shares of this company affect, among other factors, the price of these shares on the stock market. Dividends are usually paid in cash but quite often in the form of shares. When paying dividends with shares, there is no cash flow, additional shares are issued and transferred to each shareholder of this company. If cash dividends are paid, they are declared in absolute terms, for example, UAH 5.30 per share. To calculate the dividend income, we will use the formula:

where DD - dividend income;

DK - the amount of dividends for the year;

Сн is the market price of a share at the beginning of the year, UAH.

This ratio characterizes the profit of investors from dividends. However, when analyzing dividend income and comparing this indicator with other companies, one should not forget that companies pursue different dividend policies, and the total amount of shareholder income is made up of dividends and changes in the market value of a share.

Total return on common stock. The total return to shareholders of a company is determined by a combination of two main components: the increase (or decrease) in the share price and the dividends received in cash over the relevant time period chosen for analysis. Since only part of the profit belonging to shareholders is paid to them in the form of dividends, it is the amount of actually received dividends that matters to them, and, as already noted, the change in the share price, and not the declared amount of the company's profit per share. The total return on investing money in the equity capital of an enterprise is thus calculated using the following formula:

Sk -Sn D DV \u003d AR AR + DK \u003d KD + DD,

where DV - profitability of investments in own capital; DK - the amount of dividends for the year;

CHP - market price of a share at the beginning of the year, UAH;

AR - market price of a share at the end of the year, UAH.

Ratio "price/earnings per share". The owners of the company and its management often use this ratio. It is also called "profit multiple" and shows how adequately the market evaluates the results of the company's activities and its prospects. The calculation is very simple: the current market price of ordinary shares is divided by the most recent available indicator - earnings per share. In the practice of developed stock markets, it is customary to use the abbreviation for this indicator "PE" (English - "Price / EPS"). The indicator is calculated according to the formula:

CCP _ , (8.16)

where CPI is the “price/earnings per share” ratio;

SAR - the average value of the market price of a share for the analyzed period, UAH;

This indicator is always evaluated in case of a possible acquisition of the company. Profit multiples vary significantly depending on the industry and type of company. In fact, this ratio shows how the market as a whole evaluates the risks associated with a given industry or company in relation to past and future profits. As usual, a comparative analysis is carried out, and a multiple of profit for a given company is compared with the average market coefficient and with data for a group of companies selected for comparison.

To characterize the effectiveness of the dividend policy chosen by the enterprise, the dividend payout ratio is used, which is calculated using the following formula:

K _ YES, (8.17)

where KDV is the dividend payout ratio;

NCA - net profit per ordinary share, UAH.

The payout ratio is used to characterize the company's dividend policy and characterizes the share of profit paid to shareholders in cash in a given year.

The larger the share of net profit paid out as current income to shareholders, the lower the net profit capitalization rate becomes. A reduction in net income as a source of self-financing may ultimately slow down internal growth rates, limit the growth rate of the company's revenue and reduce the ability to attract loans.

The indicator, as a rule, should be less than one: KDV If we consider this indicator for a number of years, then we can assess the trends in the policy of the board of directors: the prevailing desire to reinvest profits for the development of the company or pay a large share of profits to shareholders.

It is difficult to say which is better, but the analysis of this ratio helps to determine the "style" of the company's activities. The trend is that fast-growing and developing companies usually pay out a smaller share of their profits, they tend to reinvest the profits received to ensure further growth. Companies with stable growth rates or average growth rates usually pay out a large share of the profits.

The owners of the company are always interested in the extent to which the dividends paid to them are secured by profit and cash receipts. They are also concerned about the extent to which their company's leverage, and the associated interest and debt repayments, will affect management's ability to deliver sustainable earnings growth and pay dividends in line with the company's owners' expectations.

For a more detailed description of the position of the enterprise issuing shares in the securities market, indicators are used that correlate various values ​​with the market price of the share, which allows assessing the position of the enterprise relative to other participants in the securities market.

The stability of the company in the stock market is determined using the share quotation coefficient, which shows the ratio of the market value of the share and the nominal (accounting) value and is calculated by the formula:

KKA - S“. (8.18)

where KKA - share quotation ratio;

SAR - market price of shares, UAH;

SAN - nominal share price, UAH.

This ratio characterizes the market value of the company's capital in dynamics. It reflects the sensitivity of the stock market in relation to this company, its reaction to the prospects for the development of the enterprise.

The share price indicator is calculated using the following formula:

CA - CA^ , (8.19)

where TA is the share price, UAH;

SAR - market price of a share, UAH;

ПЧА - net profit per ordinary share, UAH.

This indicator reflects the prospective dynamics of the company's position in the stock market: a higher selling price of the company's shares (with the same actual profit) characterizes the attractiveness of the shares, since investors hope to receive more profit in the future, as well as the conditional payback period of its current value. When analyzing the share price indicator, it is necessary first of all to pay attention to its dynamics over a number of periods and compare it with the dynamics of changes in profitability. A positive trend is considered to be the outpacing of the growth rate of the share price over the growth rate of profitability.

The dividend yield of a share characterizes the current profitability of the capital invested in a share:

SAR - market price of a share, UAH.

The income of shareholders of the enterprise consists of two components: -

current dividends; -

the difference between the market and par value of a share.

It should be noted that the receipt of very high dividends on shares, along with a significant increase in their market value, is a practically uncommon phenomenon. Therefore, the owner of corporate rights should not count on both positive aspects at once.

Thus, the indicator of change in the wealth of shareholders has the following form:

PBA \u003d YES + PD, (8.21)

where PBA - changes in the welfare of shareholders;

YES - the amount of dividend paid per share, UAH;

The explanatory note discloses the following information:-

an event that prompted an additional issue of ordinary shares; -

date of issue of additional ordinary shares; -

the main conditions for issuing additional ordinary shares; -

the number of additional ordinary shares issued; - the amount of funds received from the placement of additional shares (when shareholders exercise their rights to acquire additional ordinary shares with their partial payment). Table 8.8 Calculation of diluted earnings per share Name Numerator Denominator Earnings per share 64640: 3242 - Exercise

contracts 64640 + 0 = 64640 3232 + 10 = 3242 - 19.94, has a dilutive effect

13.09, has a diluting effect

144640: 10242 = Convertible 68640 + 76000 = 5242 + 5000 = = 14.12, has bonds = 144640 = 10242 anti-dilutive

effect Diluted earnings per share 13.09 If after the reporting date, but before the date of signing the financial statements, ordinary shares are placed on the appropriate terms, then the values ​​of basic and diluted earnings per share for the reporting and previous reporting periods presented in the financial statements are also subject to appropriate adjustment.

Information about events that occurred after the reporting date should be disclosed in an explanatory note.

If after the reporting date there were transactions with ordinary shares, convertible securities that are significant for users of financial statements, information about these transactions is disclosed in the explanatory note. Such transactions include: Issues of ordinary shares of significant volume; significant in terms of the volume of transactions for the repurchase of ordinary shares by the company;