Mergers And Demergers
let us imagine that a company has 500 E1 ordinary shares, and 200 £11 8% preference shares which can be converted to ordinary shares at a 2-to-1 ratio. The company makes a profit of £12400. Its eps is therefore 480p (£12400 ± 500). But if the preference shares are converted to ordinary shares, there will be an extra 100 ordinary shares, so the diluted eps is only 400p (£12400 ± 600). SEE https://www.londonstockexchange.com/traders-and-brokers/security-types/ordinary-shares/ordinary-shares.htm
'Deferred'shares are ordinary shares whose right to ,a dividend ranks after other ordinary shares. These are sometimes called founders'shares as they were often issued to the people who started the business initially.
'Partly-paid'shares are shares whose nominal value (see next section) has not been fully paid. British Gas shares, for example, had a nominal value of 130p, but were paid in three stages (known as 'calls') of 40p, 40p and 50p. When the last 50p per share was paid, the shares were 'fully paid'; until then they were partly paid. If you fail to pay a call on partly-paid shares, you lose the shares completely. This is known as 'forfeiture'.
'The law generally requires partly-paid shares to be issued for at least 25% of their par value plus premium.
'Labour shares'are ordinary or preference shares reserved for the workforce under an employee share scheme. For UK companies they have the same rights as other ordinary or preference shares, but for Australian and New Zealand companies they sometimes have restrictions on the right
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