151:, a register of the directors, shareholders, and any shareholder votes, as well as all details of the company's finances must be compiled and kept for a minimum of six years. Along with this, a comprehensive accounting record is also needed like sales and whom they are made to (until and unless it is a retail business), purchases and from whom they are supplied, stock and debts – all of them are necessary to be provided. Along with all these costs, taxes are also to be paid while a company is public floating. For instance, in the UK a company has to pay corporation tax which is 20% if the profit per year is £300,000 or less and 21% if profit is above £300,000.
56:
93:
that it has a working capital for at least 12 months. Moreover, once the company is listed, the business must be independent from any shareholder with controlling interest (anyone owning more than 30% of the company shares), and after the company is listed, at least 25% of its shares must be in the hands of the general public, that is public float, and the company must have a total market capitalization of not less than £700,000.
68:
The float is calculated by subtracting the locked-in shares from outstanding shares. For example, a company may have 10 million outstanding shares, with 3 million of them in a locked-in position; this company's float would be 7 million (multiplied by the share price). Stocks with smaller floats tend
159:
Public floating also increases pressure on a company to perform. Whenever the general public, as company shareholders, demand dividends without keeping the company's economic circumstances in proper perspective, it increases performance pressure on the company. Secondly, sometimes companies provide
168:
after using a small firm to secretly manipulate its balance sheets. Both cases illustrate that, as a result of pressure to sell shares, companies may manipulate their financial statements, and later face the consequences (Lehman
Brothers' bankruptcy in 2008, AIG's bailout by the U.S. government in
137:
By public floating, companies are vulnerable to threats of speculations and market fluctuations. During the 2008 financial crisis, several companies went bankrupt because of fluctuations in the stock market, severely limiting their operating capital to the extent that they were unable to pay their
123:
By public floating, companies can enhance their credit image. As banks and other credit providing institutions provide credit, more often to a public limited company along with this, sometimes favorable terms are also offered by credit providers because of public limited company status. Along with
92:
under UK law. Also, the company should have published or filed audit accounts for at least a three-year period, have trading and revenue earning records for at least three years, its higher management and directors must be competent enough to run a business at that scale, and the company must show
114:
By public floating, a company gains access to interest-free capital as there is no interest to be paid on shares. Though a dividend may be involved, the terms of dividend liability are far more flexible than terms for loans. Along with this, shares are not considered as a debt, and by public
146:
Costs of company registration are also very high making it difficult for certain small businesses to float shares. Along with higher costs, processes of registering and running a company are also very complex. For example, in the UK, in order to run a
39:
that are in the hands of public investors as opposed to locked-in shares held by promoters, company officers, controlling-interest investors, or governments. This number is sometimes seen as a better way of calculating
106:
By offering a public float, companies gain access to new and large capital, as the general public can invest in the company. This new capital is then used to increase the company's profits.
177:
Less public float may cause illiquidity of stocks of companies due to the low public holdings. One may not be able to transact, buy or sell orders on a respected stock exchange.
44:, because it provides a more accurate reflection (than entire market capitalization) of what public investors consider the company to be worth. In this context, the
418:
326:
73:
than those with larger floats. In general, the large holdings of founding shareholders, corporate cross-holdings, and government holdings in partially
304:
280:
411:
404:
380:
649:
674:
85:
There are certain regulations to offer public floats, though these regulations might differ from region to region.
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668:
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For instance, to offer public floats in the United
Kingdom, a company must be incorporated, i.e. be a
160:
false financial reports to sell shares which lead towards further complications in market. In 2005,
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enhanced credibility, companies can also get higher media coverage and attention of general public.
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726:
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866:
761:
644:
361:
1212:
893:
236:
148:
89:
1207:
1031:
840:
191:
41:
1166:
1086:
851:
835:
798:
680:
623:
591:
70:
8:
1096:
1041:
965:
825:
755:
584:
557:
1136:
1111:
1071:
1056:
975:
945:
914:
872:
616:
526:
516:
211:
206:
186:
115:
floating, companies can reduce their debts creating a better asset to liability ratio.
49:
258:
1000:
985:
737:
164:
had to pay a fine of $ 1.7 billion as a result of improper accounting. Additionally,
1101:
1021:
817:
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427:
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1016:
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924:
919:
904:
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488:
385:
55:
32:
1131:
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1026:
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732:
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498:
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436:
216:
1191:
995:
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909:
861:
564:
521:
508:
459:
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Portion of shares of a corporation that are in the hands of public investors
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1046:
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1141:
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1116:
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36:
1146:
1066:
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606:
118:
74:
782:
777:
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396:
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companies are excluded when calculating the size of a public float.
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596:
327:"Facebook valued at $ 104bn on record-breaking stock market debut"
804:
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creditors and were forced to liquidate their operational assets.
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470:
161:
132:
80:
119:
Enhancement of credibility and higher public profile
127:
381:"Lehman Brothers financially and morally bankrupt"
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1189:
362:"Greenberg settles AIG charges for $ 15 million"
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109:
259:"What is Public Float? definition and meaning"
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405:
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133:Company is open to market fluctuations
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166:Lehman Brothers went bankrupt in 2008
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290:
172:
379:Wolff, Richard (12 December 2011).
269:
13:
325:Rushton, Katherine (17 May 2012).
81:Public float in the United Kingdom
14:
1224:
59:SP500 Market Cap. vs Float %
675:Electronic communication network
128:Disadvantages of public floating
372:
354:
318:
281:"A practical guide to listing"
251:
229:
1:
669:Multilateral trading facility
222:
97:Advantages of public floating
52:that can be publicly traded.
1092:Returns-based style analysis
888:Post-modern portfolio theory
794:Security characteristic line
305:"EY's guide to going public"
110:Opportunities to reduce debt
7:
846:Efficient-market hypothesis
750:Capital asset pricing model
687:Straight-through processing
344:"Running a limited company"
180:
10:
1229:
663:Alternative Trading System
329:– via The Telegraph.
31:represents the portion of
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813:
712:
632:
540:
507:
468:
434:
727:Arbitrage pricing theory
286:. London Stock Exchange.
237:"Free-Float Methodology"
142:Costs of public floating
64:Calculating public float
1006:Initial public offering
867:Modern portfolio theory
762:Dividend discount model
645:List of stock exchanges
279:London Stock Exchange.
102:Greater access to funds
894:Random walk hypothesis
149:public limited company
90:public limited company
60:
1032:Market capitalization
841:Dollar cost averaging
192:Market capitalization
58:
48:may refer to all the
42:market capitalization
1203:Fundamental analysis
852:Fundamental analysis
836:Contrarian investing
799:Security market line
704:Liquidity aggregator
681:Direct market access
592:Quantitative analyst
1097:Reverse stock split
1042:Market manipulation
966:Dual-listed company
826:Algorithmic trading
756:Capital market line
558:Inter-dealer broker
155:Pressure to perform
1137:Stock market index
976:Efficient frontier
915:Technical analysis
873:Momentum investing
695:(private exchange)
585:Proprietary trader
527:Shares outstanding
517:Authorised capital
212:Shares outstanding
207:Authorised capital
187:Concentrated stock
61:
50:shares outstanding
19:In the context of
1198:Corporate finance
1185:
1184:
986:Flight-to-quality
738:Buffett indicator
428:Financial markets
263:InvestorWords.com
173:Less public float
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1102:Share repurchase
814:Trading theories
699:Crossing network
657:Over-the-counter
494:Restricted stock
450:Secondary market
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1172:Voting interest
1082:Public offering
1017:Mandatory offer
991:Government bond
971:DuPont analysis
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930:Value investing
925:Value averaging
920:Trend following
905:Style investing
900:Sector rotation
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788:Net asset value
714:Stock valuation
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489:Preferred stock
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386:TheGuardian.com
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312:Ernst and Young
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1127:Stock dilution
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1052:Mean reversion
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1027:Market anomaly
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946:Bid–ask spread
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773:Earnings yield
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659:(off-exchange)
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633:Trading venues
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445:Primary market
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239:. investopedia
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1213:Public sphere
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996:Greenspan put
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981:Financial law
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956:Cross listing
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939:Related terms
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910:Swing trading
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878:Mosaic theory
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862:Market timing
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650:Trading hours
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565:Broker-dealer
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522:Issued shares
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509:Share capital
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460:Fourth market
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368:. 2009-08-06.
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21:stock markets
1208:Stock market
1157:Tender offer
1077:Public float
1076:
1047:Market trend
1037:Market depth
857:Growth stock
831:Buy and hold
740:(Cap-to-GDP)
580:Floor trader
570:Market maker
553:Floor broker
541:Participants
484:Golden share
479:Common stock
455:Third market
384:
374:
365:
356:
347:
320:
311:
262:
253:
241:. Retrieved
231:
176:
158:
145:
136:
122:
113:
105:
87:
84:
67:
45:
28:
25:public float
24:
18:
1162:Uptick rule
1142:Stock split
1122:Squeeze-out
1117:Speculation
1062:Open outcry
951:Block trade
883:Pairs trade
197:Open market
69:to be more
37:corporation
1192:Categories
1167:Volatility
1147:Stock swap
1067:Order book
818:strategies
744:Book value
612:Arbitrager
607:Speculator
223:References
75:privatized
29:free float
783:Fed model
778:EV/EBITDA
693:Dark pool
624:Regulator
469:Types of
435:Types of
1112:Slippage
1072:Position
1057:Momentum
961:Dividend
640:Exchange
597:Investor
243:June 17,
181:See also
71:volatile
1001:Haircut
805:T-model
617:Scalper
437:markets
169:2008).
1022:Margin
890:(PMPT)
752:(CAPM)
602:Hedger
575:Trader
548:Broker
471:stocks
348:Gov.uk
33:shares
23:, the
1177:Yield
1152:Trade
1087:Rally
1008:(IPO)
896:(RMH)
869:(MPT)
848:(EMH)
801:(SML)
790:(NAV)
764:(DDM)
758:(CML)
729:(APT)
722:Alpha
689:(STP)
683:(DMA)
677:(ECN)
671:(MTF)
665:(ATS)
308:(PDF)
284:(PDF)
46:float
35:of a
1012:Long
816:and
746:(BV)
733:Beta
245:2013
366:CNN
162:AIG
27:or
1194::
383:.
364:.
346:.
335:^
310:.
292:^
271:^
261:.
420:e
413:t
406:v
389:.
350:.
314:.
265:.
247:.
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