Unit 1+2

A corporate objective of survival is most likely to be set by:

• A long-established and profitable family business

• A profitable multinational company

• A high-profile start-up financed by substantial venture capital

• An established business now experiencing growing losses

What is the market capitalisation of a company with a share price of £1.75, dividends of 10p per share and 10 million shares in issue?

• £175m

• £10m

• £1m

• £17.5m

The following are all commonly used as corporate objectives EXCEPT which one?

• Return on investment

• Inventory turnover

• Market share

• Marketcapitalisation

The level of consumer demand in general is likely to be most directly affected by changes in:

• Interest rates and exchange rates

• Exports and imports

• Wages and income tax

• Technological and social change

The term that describes the overall purpose of a business is:

• Mission

• Core values

• Strategy

• Objectives

Which of these is most likely to result in a higher share price for a quoted company?

• Profits significantly better than market expectations

• Significant new competition enters the market

• A new Operations Director is appointed to the Board

• The dividend is increased from 15p to 16p per share

The most important protection given by law to shareholders of a limited company is:

• Enhanced employment rights

• Immunity from being sued

• Right to receive dividends

• Limited liability

What "rights" do existing shareholders have in a rights issue?

• The right to choose a new Board of Directors

• Sell their shares at the highest price offered

• Vote to increase the dividend

• Subscribe for more shares - usually at a discount

Company A plc has 20 million shares in issue and a share price of 25p per share. If the share prices rises by 8%, what will Company A’s market capitalisation be at the new share price

• £5.0 million

• £5.4 million

• £8.0 million

• £8.4 million

The two most important indicators of market conditions are:

• Economic growth & market demand

• Inflation & unemployment

• Disposable income & exchange rates

• Share prices & interest rates