Overview of Equity Securities

What equity is and why companies issue it: common shares and their voting and class rights, preference shares (cumulative, participating, convertible, callable and putable), private versus public equity, the ways to invest in foreign shares (direct, depository receipts, global registered shares, baskets), the risk and return of each type, and how book value, market value, ROE, the cost of equity and investors' required return fit together.

1. 1. Equity versus debt, why companies issue shares, and equity in global marketsEquity is a residual ownership claim with no promised payments, which is why it carries more risk than debt, has historically earned more, and gives companies flexible capital to grow.Free11 min
2. 2. Common shares: voting rights, share classes, callable and putable sharesCommon shareholders own the company's residual value and govern it by voting; how votes are counted and how share classes are designed decide who really controls the board.Free13 min
3. 3. Preference shares: cumulative, participating and convertiblePreference shares sit between debt and common equity: a fixed, higher dividend and priority over common shareholders, but no promise and usually no vote.Video · 5 min13 min
4. 4. Integrated cases: share classes, control and the liquidation ladderA class structure has three separate layers to read: who votes, who is paid first in liquidation, and what the preferred shares take before either common class sees a cent.15 min
5. 5. Private versus public equity: venture capital, buyouts and PIPEsPrivate equity trades away liquidity, price discovery and disclosure in exchange for a long-term focus and lower public-company costs; public equity offers deep capital, liquidity and scrutiny.11 min
6. 6. Investing in foreign equity: direct, depository receipts, GRS and BLDRsYou can buy foreign shares directly in their home market, or buy a local-currency proxy for them: a depository receipt, a global registered share or a basket of DRs.14 min
7. 7. Risk and return of different equity securitiesAn equity's return is price change plus dividends (plus currency moves abroad); its risk is the uncertainty of that total return, which features like preference, cumulation, calls and puts raise or lower.12 min
8. 8. Book value, market value, ROE and the cost of equityBook value records what management has built; market value prices what investors expect it to build. ROE judges how well book equity is used, and the cost of equity is the return investors demand for supplying it.Video · 5 min15 min