Volume-weighted average price: Difference between revisions
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== See also == | == See also == | ||
* [[Arithmetic mean]] | * [[Arithmetic mean]] | ||
* [[Assets]] | |||
* [[Average]] | * [[Average]] | ||
* [[Benchmark]] | |||
* [[BBSW calculation methodology]] | * [[BBSW calculation methodology]] | ||
* [[Broker]] | * [[Broker]] | ||
* [[Buyback]] | * [[Buyback]] | ||
* [[Contract]] | |||
* [[Discount]] | * [[Discount]] | ||
* [[Equity share]] | * [[Equity share]] | ||
Latest revision as of 17:32, 25 December 2024
Statistics - market prices.
(VWAP).
A weighted average is a type of average, calculated using consistent appropriate weighting factors, for example volumes of assets or contracts traded.
Volume-weighted average price is an average price calculation, that uses volumes traded as the weighting factors.
- Pricing options - share buybacks
- "Some [equity share] buybacks are carried out for a fixed commission.
- However, most UK buybacks incorporate some sort of incentive for the brokers to buy as many shares as possible within the set budget.
- This ensures the company pays the lowest possible price for its shares.
- At the end of the programme, the broker will calculate the average price per share the company has paid over the life of the programme and compare that to a benchmark price.
- The benchmark price is usually the volume-weighted average price (VWAP) per share in the market for the period, sometimes with a discount applied.
- [Share buyback] pricing models include:
- (1) VWAP guarantee: the company always pays VWAP for the shares. A true-up payment is made at the end of the programme to cover the difference between actual amount paid and the VWAP price.
- (2) A variation is sometimes seen, where the guaranteed price is a set discount to VWAP.
- (3) Upside sharing: the company and the broker split the difference between VWAP (or discounted VWAP) and the actual cost of shares (again with a true-up payment at the end).
- Share buybacks: what treasurers need to know - Lucy Reeve, corporate partner, Linklaters LLP - The Treasurer - Issue 4 of 2024, p38.
See also
- Arithmetic mean
- Assets
- Average
- Benchmark
- BBSW calculation methodology
- Broker
- Buyback
- Contract
- Discount
- Equity share
- First in first out (FIFO)
- Geometric mean
- Inventory
- Last in first out (LIFO)
- Mean
- Median
- Mode
- Moving average
- Simple average
- Statistics
- True-up
- Weighted average
- Weighted average cost
- Weighted average carbon intensity (WACI)
- Weighted average cost of capital (WACC)
- Weighted Average Final Maturity
- Weighted Average Life (WAL)
- Weighted average maturity (WAM)
