Financial Markets Quiz 2-3

As a result of a bonus share issue of a company,

• Number of shares will not increase.

• New equity capital will be mobilized

• Reserves will be capitalized

• Share price will increase in the market.

As a result of a bonus share issue

• Share price will increase

• Number of shares outstanding will increase.

• Total equity of the company will increase.

• Earning Per Share will increase

Which of the following share issue will bring fresh equity funds to the company.

• Right issue

• Bonus share issue

• Stock split

Which of the following share issue will not bring fresh equity capital to the company.

• Rights issues

• Initial Public Offering

• Bonus issue

The company made a bonus issue of 1 for 4. You held a total of 5,000 shares of the company before the bonus issue was made. After the bonus issue, what the total number of shares owned by you.

• 6,000 shares.

• 6,250 shares

• 1,250 shares

• 1,000 shares

The company made a bonus issue of 1 for 10. You held a total of 2,000 shares of the company before the bonus issue was made. How many bonus shares were received by you.

• 200 shares

• 182 shares

• 2,200 shares

• 20,000 shares

Current market price of the share is USD 60. The company made a bonus issue of 1 for 4. Which of the following could be the approximate market value per share after the bonus issue.

• USD 15

• USD 60

• USD 65

• USD 48

The Company's estimated Earnings Per Share is USD 10. The company made a bonus issue of 1 for 4. What will be the estimated EPS after the bonus share issue.

• USD 10

• USD 12

• USD 2.5

• USD 8.00

Current, the book value per share is GBP 40.50. The company has announced 2 for 5 bonus share issue. The book value per share after the Bonus issue could be,

• GBP 40.50

• GBP 5.78

• GBP 8.1

• GBP 28.92

Your security analysis indicated that the company has lot of potential for growth in the futures. You decided to purchase the shares of the particular company with a long-term investment target. Your investment strategy can be recognized as

• Contrarian investing

• Value investing

• Momentum investing

• Growth investing.