Share Capital Quiz

What is "Authorized Capital" as defined by the Companies Act, 2013?

• minimum amount of capital required to start a business.

• amount of capital that has been issued to shareholders.

• the maximum amount of share capital a company can issue to shareholders as per its memorandum of association.

• the total amount of profit a company can earn.

What is "Issued Capital?

• Issued capital is the total value of shares issued by a company to its shareholders.
• Issued capital is the total number of employees in a company.
• Issued capital is the amount of money a company has in its bank account.
• Issued capital refers to the total assets owned by a company.

What does "Paid-up Capital" refer to?

• The amount of money a company owes to its creditors.
• The total profit made by the company in a year.
• The total amount of money that shareholders have paid for their shares.
• The value of all assets owned by the company.

Which of the following statements is NOT true about a share?

• Shares represent ownership in a company.
• Shares guarantee a profit.
• Shares can increase in value over time.
• Shares provide dividends to shareholders.

Which of the following is a condition for the issue of bonus shares?

• The company must have a minimum number of shareholders.
• The company must be listed on a stock exchange.
• The company must have sufficient reserves or profits.
• The company must have a positive cash flow.

What is meant by "Cumulative Preference Shares"?

• Cumulative preference shares are shares that do not pay dividends.
• Cumulative preference shares are preferred shares that accumulate unpaid dividends.
• Cumulative preference shares are common shares with voting rights.
• Cumulative preference shares are bonds that pay fixed interest rates.

What is the "Face Value" of a share?

• The market price of a share at a given time.
• The total amount of dividends paid to shareholders.
• The nominal value assigned to a share by the company.
• The price at which a share is bought or sold in the stock market.

Which of the following is NOT a feature of sweat equity shares?

• can be issued at discount

• Issued always on premium

• Issued for services rendered
• Issued to employees as reward

What happens to a share once it is converted into stock?

• • The stockholder has no voting rights.

• • It can be transferred in fractions.

• It is no longer regarded as paid-up capital.

• the stockholder is automatically entitled to dividends.

Which of the following conditions must be met for a company to buy back its shares?

• The company can only buy back fully paid up shares

• The company must have approval from Tribunal for buy back

• The company must be publicly traded on a stock exchange.
• The company must have a minimum number of shareholders.