I.

TYPES OF SHARES

The main types of shares used for creating share classes tend to usually be preferred
shares and common shares. That said, other types of shares like redeemable shares and non voting
shares are also highly popular. Let us understand what role each share type has to play.

 Ordinary Shares – Ordinary shares are the most common. The reason for that is because
they have one vote for each share. Plus, they give the owner the chance for equal
participation in the dividends of a company. In case the company ends winding up, all of the
proceeds are equally allocated. Ordinary shares have voting ights. However, they always
come after the preference shares in regards to the capital rights. You can break ordinary
shares into multiple classes as well.
 Non-Voting Shares – Non voting shares are quite different from ordinary share types in the
sense that they don’t have voting rights. These shares also don’t give you the right to come
to general meetings. In most cases, non voting shares are often provided to employees to pay
remunerations for getting improved tax efficiency
 Preference Shares – These types of shares give owners the chance to get a particular
dividend amount each year. You will receive this amount ahead of people who are holding
common or ordinary shares. Generally, the preference shares are according to the nominal
values percentage (the overall value mentioned during the issuing of shares). Preference
shares may also have liquidation rights in case of a buyout.
 Redeemable Shares – Companies issue redeemable shares on a condition that it may or will
re-purchase them later on. Redeemable shares could either be fixed or set according to the
discretion of the company’s director. This is often done with non voting stocks offered to
employees to ensure that the company gets their shares back in case an employee leaves.

II. NOMINAL VALUE AND MARKET VALUE

Nominal value a term use in both finance and economics to refer to an original unadjusted value
In finance nominal value refers to the face value or par value of a security
In simple terms nominal values are the prices we see everyday when we go to the store there also the
value in bank account, paycheck or the thing we sell informally to others in an nominal prices is what
you see is what you get
Ex.
For instance, A 10 year bond with a nominal face value of 1,000 entitles the holder 1,000 in 10 years

Nominal value is also important when pricing bonds in the secondary markets because bonds our
traded as percentages of their nominal value
The bonds price will be different from nominal value when the prevailing interest rate for similar
bonds is below or above stated rate for the bond in question
 In economics nominal value refers to a number or measurement that has been adjusted for inflation
Adjusting an economic measure such as GDP or income per capita, for inflation converts the numbers
to real values that can be compared to one another

For example

a yearly salary of 190,000 is the highest salary in 2015 but it's near above average in the
poverty line in 2022 to make an accurate comparison of purchasing power however the 2015
nominal value must be adjusted to 2022 value, 190,000 salary in 2015 has the same
purchasing power of $344,000 salary in 2022
so 2015 highest salary 190,000 and 2022 highest salary 344,000 those are nominal value
another example to this
a bakeshop has given a budget of 1000 in 2015 and 3000 in 2022 these are nominal value
but we cannot compare the budget salary of 2015 and 2022 directly because there has been
changes in the price levels to account to this, we have to convert 2000 in real value in 2015
prices
now the key points the price level risen as it usually does over time the real value will always
be less that nominal value this is because what a consumer can really buy with the same
money has declined overtime
if the price level has increased between 2015 and 2022 by 3x meaning good and services are
3x as expensive in 2022 as in 2015,
what is the real value of the 2022’s price figure of 3.000 compared to 2015 prices
well a 2000 of 2015 had the purchasing power of 2,467.69 in 2022
in short, the value of 3000 in 2022 would only buy as many good and services as 2431.41 in
2015
now we can compare the nominal value of 2022 and 2015 because both are in the same value
point
with the tripling of the price between 2015 and 2022 if we look into our government in real
terms
relative to the price level the bakeshop budget has gone between 2022 and 2015 because the
goods and services was less than what you could purchase in 2015 even the budget has gone
up the fact that you could buy less item in 2022 means the real value went down

MARKET VALUE
Market value is determined by the valuations or multiples accorded by investors to companies, such
as price-to-sales, price-to-earnings, enterprise value-to-EBITDA, and so on. The higher the valuations,
the greater the market value.
The price of an asset that is traded or offered for sale in a public forum where multiple buyers are allowed
to make offers to buy that asset. For marketable securities of publicly traded companies, the companies
are required to issue periodic financial information to the public to meet a full knowledge requirement
anyone seeking to buy or sell a marketable security has access to this information and thus the
opportunity to be an informed purchaser or a seller the requirement for publicly available information is
key to the integrity of a fair market system and it's why it is the best method of setting a market value on
securities in fact do US security market trading securities based on their insider knowledge is a civil and
sometimes criminal offense. one reason is that the party with the inside information has an unfair
advantage over the other party to the transaction and thus the price set by this sale does not reflect a true
market value
Market value is much more difficult to determine for assets that are not treated on a public exchange
For instance, real estate sales are usually public but not a public exchange like the ones for marketable
securities
In addition, each piece of real estate is unique from all others so the best approximation of market value is
to compare recent sales of similar properties.

ISSUED SHARES