Deck 7: Capacity

Question 1

The assets of the company are considered

A) the wealth of the company
B) the wealth of the shareholders
C) the wealth of the creditors
D) the wealth of the debtors

Answer 1

A

Question 2

What is a bonus issue of shares?

A) payments bankers get
B) fully paid-up shares given to existing shareholders free of charge
C) dividends paid in profitable years
D) payments instead of dividends

Answer 2

B

Question 3

What is the nominal value of a share?

A) the value stated at issue
B) the same as the market value
C) 1 pound
D) nil

Answer 3

A

Question 4

Can class rights be varied?

A) yes
B) no
C) yes, according to the provisions in the articles
D) yes, if shareholders outside the class agree

Question 5

What are class rights?

A) rights belonging to the employees of the company
B) rights of the managers of the company
C) rights of clusters of shares with identical rights
D) shareholder rights

Question 6

What are redeemable shares?

A) shares giving the holder preferred rights
B) shares that can be redeemed at the request of the holder
C) shares that bear no dividends
D) shares that are dividend bearing

Question 7

What are preference shares?

A) shares giving the holder preferred rights
B) shares that can be redeemed at the request of the holder
C) shares that bear no dividends
D) shares that are dividend bearing

Question 8

What is the meaning of cumulative dividend?

A) bonus payments made to shareholders
B) if any dividend is not paid, it accrues to the shareholder and is payable on the next payment date
C) the dividend without tax deducted
D) the dividend with tax deducted

Question 9

The presumption of equality of shares means that

A) all shares are equal
B) in the absence of provisions in the articles all shares are considered equal
C) all shares are unequal
D) provision in the articles is needed to make shares equal

Question 10

The case of Colonial Bath v Whinney (1886) 11 App Cas 426 confirmed that a share is a

A) chose in action
B) a property right
C) a statutory right
D) a financial product

Question 11

A shareholder can sell his shares

A) with the consent of other shareholders
B) with the consent of the company
C) subject to any restrictions in the articles
D) under no circumstances

Question 12

Company profits can be distributed to shareholders as dividends

A) on the demand of shareholders
B) when the company is profitable
C) after the company has paid off creditors
D) only on the decision of the company

Question 13

A company's share capital can

A) increase
B) decrease
C) increase or decrease
D) not be changed