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Proration |
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Proration Refers to the division between cash and stock in a takeover offer. Often a takeover is a combination of cash and the acquiring firm's equity. Shareholders can elect to take cash or equity. After the election is made, the stock is prorated. For example, if the takeover offer was 500 million in cash and 500 million in shares, if everybody elected cash, then the maximum cash for each shareholder is 50%. If 75% elected to receive cash, 25% of the shareholders would get 100% equity and the other 75% would get 75% cash and 25% equity. The proportions are complicated to compute if the new shares are worth more than the old shares. In this case, small shareholders (with say 100 shares) might receive 100% cash because it is disadvantageous to have a lot less than 100 shares. Pro Rata Describing a distribution according to some proportion. For example, a salary may be stated as $120,000 per year pro rata. This means that if an employee only works for six months, his/her salary will be $60,000. Likewise, dividends are distributed pro rata, meaning that shareholders receive them according to the proportion of shares that they own. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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On the ballot in November is a constitutional amendment that, if proration is declared, would allow the state’s schools to borrow money from about $3 billion in oil and gas royalties the state holds in trust. The 12 chapters compare appraisal methods for establishing valuation, walk through the calculation of yield and return, clarify the various forms of proration, suggest investment alternatives, and outline related tax rules. This preliminary proration factor is subject to change based on, among other things, the actual number of tendered shares that satisfy the guaranteed delivery procedures. |
Proration |
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