B

BOND YIELD

Investors buy bonds looking for an annual return known as a yield. There are two basic types – an income yield only takes account of the annual income a bond generates as a percentage of the current price. A yield to maturity also factors in any expected annual capital gain or loss between the point …

BOND YIELD Read More »

BOOK BUILDING

This is the process where a bank seeks support for a share transaction from typically institutional clients. So ahead of an IPO for example, where the bank needs to guarantee buyers for a firm’s shares when they are first sold, the bank will approach fund managers and ask for a commitment to buy. This is …

BOOK BUILDING Read More »

BONUS ISSUE

One way for a UK firm to reduce its average share price is via a bonus issue. Here a firm gives away free shares in a fixed ratio based on a shareholder’s existing holding. So for example a 1-for-4 bonus issue when the current price is £2.50 results in a shareholder receiving one free share …

BONUS ISSUE Read More »

BOOK VALUE

Firms are required to record assets and liabilities in a balance sheet at the point they are acquired or taken on. The sum of a firm’s “book” assets, net of outstanding liabilities, is known as its net asset value. This can also be referred to as the firm’s total book value. It won’t necessarily be …

BOOK VALUE Read More »

BREAKEVEN POINT

This is the point where a particular deal leaves you with no overall profit or loss once all costs are factored in. So if for example you buy a share for £2.50 and pay costs and commission of 5p, your breakeven point is £2.55 since at that price you could sell the share and recover …

BREAKEVEN POINT Read More »

BULL

Someone who expects prices, whether for shares, property, currencies or commodities, to rise. When prices do rise consistently, it is referred to as a “bull market”. READ MORE

BRICS

This is the acronym used as a short way to describe Brazil, Russia, India and China. These countries (along with South Africa) were once identified as the leaders in emerging markets growth however their recent performance has been mixed. READ MORE

BUSINESS RELIEF

Formerly known as business property relief, business relief (BR) is a way to potentially remove qualifying assets from the scope of inheritance tax on death. Only certain assets qualify and must usually have been held for a minimum of two years before death. It can be particularly useful for investors who hold AIM shares as …

BUSINESS RELIEF Read More »

BUSINESS CYCLE

Lasting around ten years or so historically in the UK, a business cycle is thought to be a consequence of the way businesses and investors interact. There are two basic economic phases – expansion and contraction – and one inevitably leads to the other, according to traditional economics. For example, when confidence is rising, businesses …

BUSINESS CYCLE Read More »

BALANCE SHEET

A statement of a firm’s net worth, a balance sheet lists what the company owns (assets), what it owes (liabilities) and how it has all been financed (shareholders’ funds). A growing balance sheet generally reflects the fact that a firm is profitable. READ MORE