Rights, ESOPS, Bonus shares, Split Shares

Do ESOPs align the interests of employees with those of shareholders?

• Yes

• No

If you own a part of a company, what are you called?

• Partner
• Employee
• Investor
• Shareholder

Why might a company split its stock?

• To reduce the number of shareholders.
• To improve the company's credit rating.
• To make shares more affordable and increase liquidity.
• To increase the company's market share.

What is it called when a company gives its current owners a chance to buy more pieces of the company at a lower price?

• Share buyback
• Dividend payout
• Stock split
• A Rights issue

When a company is 'cash-strapped,' what does it mean?

• The company is investing heavily in new projects.
• The company is expanding its operations.
• The company has an abundance of cash.
• It means the company is experiencing a shortage of cash.

Why would a company issue a rights issue when it wants to grow?

• To reduce existing debt obligations.
• To distribute profits to shareholders.
• To increase stock prices immediately.
• To raise capital for growth.

What is the purpose of issuing bonus shares?

• To decrease the stock price
• To reward shareholders and improve liquidity.
• To increase the company's debt
• To reduce the number of shareholders

In a rights issue, who gets the first opportunity to buy new shares?

• New investors
• Company executives
• Existing shareholders
• Government regulators

Why might employees feel more motivated with an ESOP?

• Employees feel more motivated with an ESOP because they have a stake in the company's success.
• Employees feel more secure without any financial risk.
• Employees are less engaged with company performance.
• Employees prefer higher salaries over ownership stakes.

What happens to the share price immediately after a bonus issue?

• The share price remains unchanged.
• The share price increases significantly.
• The share price typically decreases proportionally.
• The share price doubles immediately.