PDSnet Glossary

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Definition

<p style="text-align: justify;">This is the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">average</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">price</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">weighted</span> for the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">volume</span> traded each day over a defined period such as the previous 30 days. The VWAP is used to price <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">rights issues</span>, <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">acquisitions</span>, <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">mergers</span> and other <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">corporate</span> actions which require a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">share</span> value. Thus, for example, a rights issue could be pitched at a 10% <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">discount</span> to the 30-day VWAP - or an acquisition for shares could be based on a value for the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">parent company</span>'s 30-day VWAP (which would then determine how many of the parent company's shares the vendors would receive).</p>