Narrow-Based Weighted Average
Definition of 'Narrow-Based Weighted Average'An anti-dilution provision used to ensure that investors are not penalized when companies are undergoing additional financing or issuing new shares. A narrow-based weighted average takes into account only the total number of outstanding preferred shares for determining the new weighted average price for the old shares. |
|
Investopedia explains 'Narrow-Based Weighted Average'The new weighted average price is adjusted for the preferred shareholder, thus providing protection against dilution. The narrow-based method is the most favorable for investors, as it lowers the price of the preferred shares more than other methods. |
Related Definitions
Articles Of Interest
-
Forces That Move Stock Prices
You can't predict exactly how stocks will behave, but knowing what affects prices will put you ahead of the pack. -
Knowing Your Rights As A Shareholder
We delve into common stock owners' privileges and how to be vigilant in monitoring a company. -
What is the difference between preferred stock and common stock?
Preferred and common stocks are different in two key aspects. First, preferred stockholders have a greater claim to a company's assets and earnings. This is true during the good times when the ... -
Weighted Average Cost Of Capital (WACC)
Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality -
Guide To Embedded Options In Bonds
Investors should be aware of embedded options that may be available in certain securities as these options may affect the value of the security. -
Visual Guide To Investing In Preferred Stock ETFs
Preferred stock ETFs have become a big hit with some investors. Find out why! -
$1 Salaried CEOs Making Millions
Some CEOs who are paid $1 annually are actually among the highest-paid when all forms of compensation are taken into account. -
How Will Your Investment Make Money?
Discover the basic types of investment income and which asset classes pay them. -
How To Live Off Your Dividends
One way to enhance your retirement income is to invest in dividend paying stocks and mutual funds. -
A Primer On Preferred Stocks
Offering both income and relative security, these uncommon shares may work for you.
Free Annual Reports