What is postponed capital?
Delayed capital concerns any investment vehicle that provides the investor the opportunity to buy a ordinary share from the company in the future. Although the investor does not immediately receive stock shares, he can transfer his current securities to shares at a certain point if the basic stock price moves in a positive way. The two most common types of delayed capital are convertible bonds and convertible preferred stocks. In both cases, these securities may be traded on the secondary market, and their prices depend on how close the current price to the price is where the conversion becomes profitable.
Many investors would like to buy their own capital of the highest company. If they can do it, they will benefit if society's wealth improves and justice will become more valuable. Unfortunately, the cost of purchasing ordinary shares in established companies is often very expensive. One alternative for those investors who desire the homelandCapital at reasonable prices is postponed its own capital.
The idea that is behind the postponed capital is that investors have the opportunity to convert the safety they have purchased into actual ordinary stock shares whenever in the future. This date can be determined at the beginning of the agreement or may come if the price of the underlying shares reaches a certain price. Investors usually receive some kind of fixed income from investment until they transfer to ordinary shares if it actually arrives.
persuasive bonds and preferred convertible stocks are two popular types of delayed equity. For convertible bonds, investors receive interest payments from bond issuer and can transfer bonds to the ordinary share at a certain point. In the case of convertible preferred shares, an element with a fixed income of investment from regularly planned dividend payments comes. PreferredThe Also stores promise that investors will return capital before the ordinary shareholders if the issuing company ever reached a point where bankruptcy or business is.
No matter what type of delayed capital it is selected, investors must determine the point at which the profitable converting securities is to its own capital. If this point is achieved, the conversion element of security in money is reportedly. Regarding the sale of these securities on the secondary market, the proximity of the stock price is an important factor to be in money. As the stock price approaches to being in money, investors can demand more bonuses.