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LSDefine
Simple English definitions for legal terms
unit rule
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A quick definition of unit rule:
Unit rule: A way of figuring out how much a group of stocks is worth by multiplying the number of shares by the price of one share. It doesn't take into account any other information about the value of the stocks. In politics, it's a rule that lets a group of people vote together based on what the majority of them want.
A more thorough explanation:
Definition: Unit rule is a method of valuing securities by multiplying the total number of shares held by the sale price of one share sold on a licensed stock exchange, ignoring all other facts about value. In parliamentary law, it is a convention's rule that lets a delegation's majority cast the entire delegation's votes.
Securities: If an investor holds 100 shares of a company and the sale price of one share is $50 on a licensed stock exchange, the total value of the investor's shares would be $5,000 (100 x $50).
Parliamentary Law: In a convention, if a delegation has 10 members and the majority of the delegation (6 members) vote in favor of a motion, the entire delegation's votes will be cast in favor of the motion, even if some members disagree.
These examples illustrate how the unit rule works in different contexts. In securities, it simplifies the valuation process by ignoring other factors that may affect the value of the shares. In parliamentary law, it allows for efficient decision-making by giving the majority of a delegation the power to make decisions on behalf of the entire group.