MARKET OF FINANCIAL SERVICES

SOMCHENKOV Oleksandr Anatoliyovych

Issues of preferred shares functioning in Ukraine

The problems of preferred shares functioning in Ukraine are substantiated based on summarising the international practice of preferred shares ’ utilisation, studying national legal regulation of their issuing and turnover, as well as processing stock exchange information. In the context of researching issues of preferred shares functioning, particular attention is paid to cash flow formation according to an instrument, the appropriateness of rejection of simultaneous dividend or salvage (surrender) value fixation is substantiated. It is suggested in the article to standardise major characteristics of such types of preferred shares as non-cumulative preferred shares, callable preferred shares, puttable and convertible preferred shares. It is suggested interpretation of nominal, market, surrender and salvage value of shares, and the necessity of their legislative fixing is substantiated. In order to create additional leverage of operational management of capital stock and dividend policy realization, as well as to respond immediately to market dynamics it is suggested to delegate the right to make decisions regarding redemption of shares of their own issue to the auditing commission with further reporting on the general meeting. The arguments concerning the possibility of half-yearly and quarterly payments of preferred share dividends are given.

Keywords:shareholder, preferred share, authorised capital, dividends, dividend policy, preferred share value.

JEL: G30, G32, Q16

SOMCHENKOV O. A. Issues of preferred shares functioning in Ukraine / O. A. SOMCHENKOV // Фінанси України. - 2014. - № 6. - C. 63-79.