Paid-up Capital
paid up capital is the Capital acquired by selling shares to investors, as distinguished from capital accumulated from earnings or from secured or unsecured loans. The total amount of shareholder capital that has been paid in full by shareholders.
Paid-up Share
A share whose issue price has been paid in full. The buyer then has to respond to subsequent calls.
Panic
The First Law of Disciplined trading in the stock market is Don’t panic; but if you do, be the first.
Panic Selling
A condition of the stock market in which not only inexperienced investors, but also sturdy bulls, take fright and start selling. It may be caused by sudden unfavourable news or rumour, or a RANDOM WALK by share downwards, or simply, in bear market conditions, the absence of financial institutions from the market.
Paper Loss
A loss which remains only on paper, because the investor hasn’t really sold his shares bought at a higher price. A poor consolation, for the share prices may go down further till the investor has to sell at a much greater actual loss.
Paper Profit
A profit which remains only on paper, because the investor hasn’t sold the shares which have appreciated in price. The only real profit on the stock market is booked profit, i.e., profit made on shares actually sold.
Parent Company
A company which owns or controls subsidiary companies by means of owning a majority of voting shares. A parent company usually has a business of its own.
Parking Shares
Placing one’s assets in safe investments while alternative investment opportunities are being considered, or while the stock market is unfavourable for fresh investments. See, however, SHARE PARKING, for quite a different meaning.
Par Value
the face value, or the price of a share, debenture, or bond that is written on the certificate. If is not the market price.
Payout Ratio
This is dividend per share divided by earnings per share and the sum multiplied by 100. If the payout ratio is 40% it means that 40% of the company’s profits after tax have been distributed as dividend and 60% transferred to reserves. A very high dividend payout may not be healthy, as it will slow down the building up of an adequate reserve. When a company has more than enough reserves, it can always reward the shareholders by issuing BONUS shares. Also called DIVIDEND COVER.
P/D Ratio
Price – dividend ratio; price divided by last dividend; Measures the value of an investment.