Novartis begins separation from Sandoz | the company’s health

share

Security representing a share in the capital of a public company. This ensures the owner membership rights (the right to vote and the right to vote at the general meeting) and ownership (right to a share in the profit, share in capital increases or in the liquidation result).

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shareholder value

The management responsible for an AG and the board strive to maximize shareholder value in order to continuously increase the company’s value for shareholders.

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stock Exchange

Regular market organized according to fixed customs. Depending on the traded goods, you speak z. B. from securities, securities, foreign exchange, commodity exchanges or derivatives exchanges (futures exchanges).

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Manager

Anglo-Saxon acronym for Chief Executive Officer, Chief Financial Officer, Chief Investment Officer and Chief Operating Officer, which together make up the Executive Board.

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cash flow

Usually generated cash flow from a company’s operating activities. Extraordinary expenses and income should be excluded from the cash flow calculation, as should extreme changes in the formation or release of hidden reserves.

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yield

The percentage of earnings paid by a company per stock. The dividend is determined by the general meeting at the request of the board of directors. Payments to holders of dividend certificates are also referred to as dividends.

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dividend policy

Specifications established by the board of directors upon which the distribution of dividends is based. A requirement may be to pay out between 25 and 40% of profits (profit distribution ratio) as dividends (which is common today). However, the board can also aim to always pay out a dividend, i.e. across business cycles – then in very good years it will increase the dividend less in order to have funds available for distribution in bad times. Earnings-based and constant (or a hybrid) are the most common types of dividend policies. However, there are also companies that do not pay dividends. This is the case, for example, when a company grows rapidly and immediately invests the profits in further expansion.

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yield percentage

Return on a share investment expressed as a percentage: The dividend return represents the dividend paid out in one year as a percentage of the price In practice, the expected dividend return is relevant as a selection criterion, but it is not guaranteed.

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general Assembly

An AG’s supreme body. In addition to the ordinary ordinary general meeting, an extraordinary general meeting can also be called.

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insider

Person who knows a confidential fact or has non-public information which, once known, is likely to affect the price of securities.

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price-earnings ratio

Share price in relation to earned or expected earnings per dividend bearing share. The stock valuation ratio indicates how many times the earnings per share is included in the share price. P/E can be used to compare different stocks within an industry.

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possibility

The right – but not the obligation – to buy (call) or sell (put) a fixed amount of a specific underlying asset at a previously determined exercise price within a specified period (maturity). For this right, the option holder pays an option premium to the seller of the option. Options can be traded individually between the parties (OTC option), securitized in a warrant or traded on futures exchanges.

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SMI

Calculated from the free float of the twenty most important listed Swiss companies. The SMI is not dividend adjusted, so it is a price index.

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spin off

Spin-off and independence of a company from a group. Either the shares in the new company will be transferred directly to the former shareholders, or they will be listed on the stock exchange through an IPO.

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Board of Directors

Monitors and directs (through the definition of strategy) the management of a company for all shareholders. As a general rule, according to Swiss law, the majority of the board members of an AG must have Swiss citizenship and be domiciled in Switzerland. The board consists of executive (internal) and non-executive (external) members. As part of good corporate governance, the practice is becoming more and more established that a significant part of the board must not have any business relationship with the company. The board is elected by the general meeting.

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