Annual General Meeting - AGM

  

No, this isn't a yearly get-together of high-ranking army guys, where they face off in very-well-strategized three-legged races. Rather, this is the yearly get-together of shareholders of a company. (The frequency of picnic games varies from company to company...)

Each year, companies are required to host an annual general meeting, giving shareholders a chance to hear from management. This gives owners (keep in mind that the shareholders are the owners of the company) an opportunity to get briefed on where business stands and to receive an update on the company's strategy going forward.

Usually, management and the board of directors will make a presentation detailing the company's annual report and take questions from shareholders. There might also be items for shareholders to vote on, such as membership on the board of directors or changes to company policy.

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Finance: What is Equity?44 Views

00:03

Finance a la Shmoop what is equity well its ownership that's

00:08

what here's equity here's equity and here's [Vehicle with a paid sticker on the windscreen]

00:12

equity this is your equity in the pie your share of ownership your one

00:19

ten-millionth ownership of whatever dot-com which just went public example

00:24

you buy a home for 500 grand putting down a hundred thousand dollars and [Chalkboard with price of a home in front of a house]

00:27

taking out a loan or mortgage of four hundred grand over the next eight years

00:32

you pay down that mortgage to be just three hundred grand and in the mean time [A payment chart graph]

00:36

the value of your house has grown to seven hundred grand

00:40

someone actually knocks on your door and offers to pay you that much in cash that [Man knocks on door and offers to pay for the house]

00:44

day all right what's your equity ownership in the house worth well you

00:49

have seven hundred grand as the price of the thing you own you have three hundred

00:52

grand in loans against it so if you sell you have to pay back the loans generally

00:57

speaking and you're left with four hundred grand as the value of the equity

01:01

you have in your home so let's spin things differently instead of the bank [A number wheel spinning]

01:06

loaning you debt money to buy your home the bank decides to partner with you as

01:11

[Bank shakes a womans hand] a co investing equity player well together you buy a condominium for 250

01:16

grand with you putting down 100k and the bank putting down 150 K both in equity

01:21

time passes tick tick tick and you sell the condo a decade later for $500,000 [Woman sells condo for $500,000 and hands over apartment]

01:28

okay now who gets what well now the bank was your equity partner instead of your

01:34

debt partner or lender so when you bought the condo you owned a hundred

01:39

divided by 250 of it or 40% and the bank owned a hundred fifty over 250 of it or [Woman doing math calculations on a chalkboard]

01:47

60% nothing changed your ownership stakes remained flat at forty sixty so now

01:53

at 500 K you sell and you keep 40 percent or two hundred thousand dollars

01:57

and the bank keeps sixty percent of five hundred K or three hundred grand and you [Woman and bank stand as dollar signs fall from the sky]

02:01

both doubled your money and note the power of debt or leverage in this model

02:07

had the bank loaned you the 150 K as debt instead of being your equity [Bank hands money to woman]

02:12

partner you would have probably paid off $50,000 or so of that loan in the ten

02:16

years you had it so you'd owe a remaining hundred

02:19

thousand dollars but you'd have sold it for the same five hundred grand and

02:23

after paying off the loan you'd have four hundred thousand dollars in your

02:26

pocket instead of two hundred thousands and yes there were interest payments

02:30

that went along the way as well as upkeep and risk and other things but in [Interest payments of 351,000 dollars on chalkboard]

02:34

theory you could have rented the home and hopefully you'd have broken even in

02:38

rational real estate rental market sorry we usually don't put that much math in [Lots of numbers on a pie as girl takes a slice]

02:42

our pie

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