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Balance Sheet Quiz

When a company sells its shares to the public for the first time, this is known as an IPO. What does IPO stand for?

If a share sale is underwritten, this means that:

What is the significance of a preference share being described as cumulative?

company has seen its share price rise from £1 to £40, and smaller potential investors are complaining that this is affecting their ability to buy shares in the company. Which one of the following might overcome this problem?

If a '5 for 3' rights issue is made at £1.90 per share, How much would a shareholder who owns 15,000 shares pay to the company to buy all the shares he is entitled to?

If a '3 for 2' bonus issue is made to a shareholder who originally paid £2 per share for 10,000 shares, how much would the shareholder pay for the bonus shares if the current market value is £4 per share?

A company has given its managing director the option to buy 10,000 shares at £3 each in five years' time. The current share price is £1 and the nominal value is 50p. How much profit would the director make if he exercised his option at a time when the share price had risen to £6 and he immediately sold the shares at that price?

Shares 'bought back' by a company are referred to on a balance sheet as:

If a company has redeemed part of its share capital, and has not at the same time replaced the shares by a new issue, it must transfer distributable reserves into:

A company has issued 2m shares at £3.50 each. The nominal value of each share is 50p, and the stock market price is £5. What entries must be made on the balance sheet to record this share issue?

Tagged as: balance sheet, balance sheet, share
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