IGCSE Business Plenary PLCs

When a company first makes its shares available for purchase on a stock market it is known as:

• underwriting

• flotation

• de-listing

• incorporation

Which of the following is a disadvantage of being a plc?

• difficult to raise finance

• owners may struggle to cope with workload

• difficult to retain full control

• shareholders have limited liability

Which of the following is not a feature of a public limited company?

• unlimited liability for the owners

• managed by appointed directors

• able to raise a lot of share capital

• auditors must verify published accounts

Which of the following is true for a public limited company?

• It can issue shares.

• It does not have profit as an objective.

• It is owned by the government.

• Its owner(s) have unlimited liability.

A business whose main objective is to survive is likely to be:

• experiencing growth in its market share

• making a large profit

• well established and successful

• working hard to stay in existence

Two clothing manufacturers have different objectives. Which of the following is not a possible reason why the two businesses have different objectives?

• One business makes coats and the other makes jeans

• Only one of the businesses makes designer clothing

• There is little innovation in the clothing industry

• They have different owners

Alex, a sole trader, opened a hair salon three years ago. He has recently changed the main objective of the business from ‘profit’ to ‘survival’. What would explain this change of objective?

• The hair salon has already achieved its profit objective

• The hair salon has gained a lot of new customers

• The hair salon is experiencing intense competition

• The hair salon is now an established business

Performance data for Pallin Ltd for the last five years of trading is shown below.

Pallin Ltd’s average level of profit over the last five years is:

• £4000 per year

• £5000 per year

• £6400 per year

• £8000 per year