Variant II COMPANY FINANCE A company's share capital is often referred to as equity capital. Part of the company's profit is paid to shareholders as a dividend according to the number of shares they own. If shareholders sell their shares they get more or less than the face value. It depends on the fact if the company is doing well or badly. If the company needs to raise more capital for expansion it might issue new shares. Often it gives existing shareholders the right to buy these new shares at a low price. This is called right issue. If the company wants to turn some of its profit into capital or capitalise some of its profit it can issue new shares at no cost to the existing shareholders. This issue is called bonus or capitalisation issue. Companies often issue such shares instead of paying dividends to the shareholders. A business must be supplied with finance at the moment it requires it. If there is a regular inflow of receipts from sales and a regular outflow of payments for the expenses of operation there are no serious problems. But in many cases a considerable time must elapse between expenditure and the receipt of income. It is the purpose of financial institutions to assist in the financing of business during this interval. Business companies turn to the capital market and the commercial banks for assistance. share capital (equity capital, joint stock capital, stock) акционерный капитал rights issue выпуск акций для размещения среди существующих акционеров according to согласно (ч.-л.) to turn into превращать(ся) в... face value нарицательная стоимость to capitalize капитализировать to raise собирать деньги to elapse проходить(о времени) Exercise 1. Make sentences using the words in the correct order 1 Profit, are, of the company's, dividends, the part. 2 Shareholders, paid, to, dividends, are. 3 Own, the number, shareholders, of shares. 4. Shares, sometimes, sell, their, shareholders. 5 Is, well, the company, doing. 6 Might, new, the company, shares, issue. 7 Buy, at a low, these, they, new, price, shares. 8 Finance, must, with, supplied, business, be. 9 Are, no, problems, there, serious. 10. Market, companies, to the capital, business, turn. 11. Assist, commercial, business, banks, companies. Exercise 2. Answer the questions 1. Whom does the company pay the part of its profit? 2. How much is a dividend? 3. What should a company do in order to raise the capital? 4. What must a company do if it wants to turn some of its profit into capital? 5. When does a business have serious problems? 6. Who must control the financing of business between the expenditures and receipt of income? 7. What is capitalization issue? Exercise 3. Complete the sentences 1. ……. is a part of company`s profit. 2. If the company is doing well …. get more than the face value when … the shares. 3. ………… is when existing shareholders have the right to buy shares at a low price. 4. Company issues bonus at ……. to the existing shareholders when it does not want to pay dividends. 5. Business companies may turn to ……… and …… for assistance. Exercise 4. Translate the following words and word combinations 1. акционерный капитал (3 варианта) 2. акции 3. акционеры 4. нарицательная стоимость 5. нарастить капитал 6. покупать акции по низкой цене 7. выпускать акции 8. существующие акционеры 9. поступление денежных средств 10. отток платежей 11. рынок привлечения финансов Exercise 5. Write the synopsis of the text.