Dealing spread
The dealing spread ('spread' or 'bid-offer' spread) is the difference between the price at which you can buy (offer) and the price at which you can sell (bid).
For example, Ben buys 1000 shares in a company at 130p per share (the 'offer' price). He pays 1000 x 130p=£1,300 in total (ignoring the cost of dealing).
If the spread is 5p, he could immediately sell the shares at 125p each (the 'bid' price). In other words, he would make an immediate loss of 1000 x 5p=£50. The shares must rise by at least 5p per share before he can make a profit on them.
The situation described above is a simple example only. Figures such as the dealing spread and the cost of dealing vary.
See share price
Debenture Stock
A fixed interest security issued as loan capital. Debenture stocks are traditionally a common form of long-term borrowing. Debenture stocks are usually secured on the company's assets and therefore rank ahead of shareholders funds in the event of liquidation
Debt
For AIC statistics purposes, debt is the total value of all prior charges ranking before equity capital. Debt is also referred to as that which is used for investment purposes. See gearing.
Debt cover
For AIC statistics purposes, this is the ratio of total assets to the company's debt. Typically debt cover is an indicator used by banks in setting covenants in respect of loans to investment trusts.
Discount
If the share price of an investment company is lower than the net asset value (NAV) per share, the company is said to be trading at a discount. The discount is shown as a percentage of the NAV. The opposite of a discount is a premium. It is more common for an investment company to trade at a discount than a premium. Please see Premium.
Discounts/premiums published on the company profile pages and search processes tables are calculated based on estimated data by Morningstar. For further information please see Net asset value.
Distribution yield
Published for VCTs - Previous financial year annual dividend distributions (income and capital) as a percentage of the current mid-market share price.
Dividend
The income from a shares investment. Some investment trust companies pay dividends on a quarterly or monthly basis.
Dividend growth
The 5 year dividend growth data published on this site shows the dividend growth over the past 5 years annualised to give a compound percentage rate per year. Please note that special dividends are excluded in dividend growth data published by the AIC.
Dividend yield
The annual dividend expressed as a percentage of the current market price. The yield on an investment company share, or any other share, indicates the size of the income return on the share in relation to its current price (not what investors paid for it in the past). It is calculated by expressing the annual dividends as a percentage of the share price. A dividend yield can give you an indication of the potential level of income you would get from an investment company share. However, future dividends may be higher or lower than indicated by the current dividend yield depending on the performance of the company. Please note that special dividends are not included in dividend yields published by the AIC.
Please see distribution yield for data published on VCTs.
