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. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  3. Full Ratchet

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

    An anti-dilution provision used to ensure that investors are ...
  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 FAQS
  1. No results found.
Related Articles
  1. Bonds & Fixed Income

    Use Duration And Convexity To Measure Bond Risk

    Find out how this measure can help fixed-income investors manage their portfolios.
  2. Fundamental Analysis

    Gauge Portfolio Performance By Measuring Returns

    Calculate returns frequently and accurately to ensure that you're meeting your investing goals.
  3. Bonds & Fixed Income

    Investors Need A Good WACC

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality.
  4. Options & Futures

    All About EVA

    Looking for a formula to determine whether a company is creating wealth? Time to learn all about economic value added.
  5. Economics

    Afraid Of A New Financial Crisis?

    It may be time for the U.S. to adopt a model for financial companies that better deters risky financial behavior.
  6. Trading Strategies

    What You Need To Know About Preferred Stock

    Curious about preferred shares? Here's what you should know about these bond-like instruments.
  7. Bonds & Fixed Income

    Evaluating A Company's Capital Structure

    Learn to use the composition of debt and equity to evaluate balance sheet strength.
  8. Investing Basics

    How Will Your Investment Make Money?

    Discover the basic types of investment income and which asset classes pay them.
  9. Insurance

    Liquidity And Toxicity: Will TARP Fix The Financial System?

    TARP is the government's attempt to forestall a deep, extended recession. Will it work?
  10. Investing Basics

    Goldman, the Muppets and the Mystery of ‘Pretty Fishy; Dodgy’ Holdings

    Georgetown finance professor James J. Angel along with other investors are battling Goldman Sachs over the takeover of a hotel company. It's a "Muppet revolt," he says.

You May Also Like

Hot Definitions
  1. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  2. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  3. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  4. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  5. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
  6. Irrevocable Trust

    A trust that can't be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets ...
Trading Center