Filter by Categories
Accounting
Banking

Finance




Profit Participation Certificate


A certificate that combines specific elements of shares and bonds. It entitles the holder to a profit interest, repayment or loss participation, but no voting rights.

Profit participation certificate (PPC) are a special type of securities between equity instruments (stocks) and debt instruments (bonds). The PPC holders enjoy certain capital rights, where such instruments are defined by certain essential elements such as profit distribution, risk participation and maturity.

These certificates are issued by firms as a means of raising capital (from external sources) without having to take on new owners as holders of its stocks. The PPC owners, i.e., the participants, are entitled to receive a share in the issuing firm’s profit. This entitlement is limited to net profit, and not to a firm’s assets. The holders do not have any right of ownership over the issuing firm or its stocks.



ABC
Finance, as a field of knowledge, is substantially wide-ranging and virtually encompasses everything in the realm of corporate finance, financial management, ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*