Voting interest

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Voting interest (or voting power) in business and accounting means the total number of votes entitled to be cast on the issue at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event which has not occurred at the time.^[1]

Voting interest is one form of economic interest. Economic interests comprise all types and forms of investment vehicles that an investee could issue or be a party to, including equity securities; financial instruments with characteristics of equity, liabilities, or both; long-term debt and other debt-financing arrangements; leases; and contractual arrangements such as management contracts, service contracts, or intellectual property licenses.^[2]

Ownership of more than 50% of voting shares generally gives the right of control and consolidation.^[3] In special cases, control is possible without having to own more than 50% of voting stock.^[4] For example, if agreed, shareholders may pass control to a chosen one owning much fewer shares (for example in the case of the two petroleum companies, MOL Group and INA - Industrija nafte).

Example

Company ABC issues 1,000,000 ordinary shares and 500,000 preferred shares outstanding.
Company XYZ buys 700,000 voting shares and 100,000 preferred ones.
Therefore, XYZ's voting interest is (700,000/1,000,000) = 70%, and its economic interest is (800,000/1,500,000) = 53.33%

References

External links

Financial markets

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Related terms	Block trade Cross listing Dark liquidity Dividend Dual-listed company DuPont analysis Efficient frontier Flight-to-quality Haircut Initial public offering Margin Market anomaly Market capitalization Market depth Market manipulation Market trend Mean reversion Momentum Open outcry Public float Public offering Rally Returns-based style analysis Reverse stock split Share repurchase Short selling Slippage Speculation Stock dilution Stock market index Stock split Trade Uptick rule Volatility Voting interest Yield

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