Broad-Based Weighted Average

AAA

DEFINITION of 'Broad-Based Weighted Average'

An anti-dilution provision used for the benefit of existing preferred shareholders when additional offerings are made by the corporation. The broad-based weighted average accounts for all equity previously issued and currently undergoing issue.

INVESTOPEDIA EXPLAINS 'Broad-Based Weighted Average'

The new weighted average price is adjusted for the preferred shareholder providing for protection against dilution. However, because all equity issued by the company is included in the weighting process, it is not as favorable as other weighting methods.

RELATED TERMS
  1. Anti-Dilution Provision

    A provision in an option or a convertible security. It protects ...
  2. Full Ratchet

    An anti-dilution provision that, for any shares of common stock ...
  3. Narrow-Based Weighted Average

    An anti-dilution provision used to ensure that investors are ...
  4. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  5. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders ...
  6. Equity Financing

    The act of raising money for company activities by selling common ...
Related Articles
  1. Use Duration And Convexity To Measure ...
    Bonds & Fixed Income

    Use Duration And Convexity To Measure ...

  2. Gauge Portfolio Performance By Measuring ...
    Fundamental Analysis

    Gauge Portfolio Performance By Measuring ...

  3. Investors Need A Good WACC
    Bonds & Fixed Income

    Investors Need A Good WACC

  4. All About EVA
    Options & Futures

    All About EVA

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center