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Deffered Shares???
06-27-2003, 04:55 AM
Post: #1
Deffered Shares???
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Has anyone heard of the term deffered shares???
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06-28-2003, 01:37 AM
Post: #2
 
Hi,
'Deferred Shares' are part of the ordinary capital of a company, these shares have exactly the same rights as ordinary shares with the exception that they do not get a dividend until certain conditions are met; for example, until after a specified date in the future or unless a certain level of profitability is reached.
If further explanation required please do reply.
Everyone disagreeing to this definition is also welcome to argue..... it'll surely help me to learn.

Edited by - TheOne on Jun 28 2003 121901 AM
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06-29-2003, 06:21 AM
Post: #3
 
Thanx for the help, but can u give some more details especially about any printed matter(book,magazine etc.) on te topic. Also name of any company in which these are appearing in the annual report.
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06-30-2003, 04:35 AM
Post: #4
 
Hi,
As far as my limited info is concerned, unfortunately I can't recall any such case in Pakistan. Further since 'Deferred Shares' topic is not such a vast topic which may require a complete 'book'.
However, you can find this definition in some different words in 'Dictionary of Banking' (Third Edition - By F.E. Perry & G. Klein[Published in association with'The Chartered Institute of Bankers', England]). (I hope said publishers would not sue me for copyright infringement?????)...
Actually my words were bit different because I'd read it long ago but somehow meaning was the same.
For you I'm reproducing said definition as given in above referred dictionary
Quote
Shares postponed to ordinary shares; they receive a dividend only if the dividend on the ordinary shares reaches a certain level. These are sometimes called 'Management or Founder's shares' and are created to remunerate the founders or promotors of a company. When the company profits are good the return from 'Deferred Shares' may be very considerable.
Unquote.

In addition to the above, I'd also read somewhere that these shares are also descriptively termed as 'Dividend Level Conditionality Shares' and 'Deferred Dividend Shares".....
Goodluck..



Edited by - TheOne on Jun 30 2003 125135 AM
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07-10-2003, 05:54 AM
Post: #5
 
Thanx The1,
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07-13-2003, 02:51 PM
Post: #6
 
theOne is spot on.
I used to thought deffered shares were those that were given dividend in the end. But now I know they mean a little more than that.

Just to add, they aint very popular abroad either, cause of the higher risk.

Me rulz
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