What is the nature of a share in a company?

A share is a fixed sum of money.

A share is an immovable property.

A share is a non-transferable asset.

What is the purpose of book building in an IPO?

To determine the exact fixed price for shares.

To allow investors to bid on a price range.

To restrict the sale of shares to institutional investors.

To prevent companies from going public.

In the book building process, what is the "cut-off price"?

The maximum bid price received.

The minimum bid price received.

The final price at which securities are offered.

Under what conditions can the directors of a company reject the transfer of shares?

Directors can reject transfer for any reason.

Directors can reject transfer to protect individual shareholders.

Directors can reject transfer only if the transferor is insolvent.

Directors can reject transfer in the interest of the company and shareholders.

What is the main advantage of book building over the fixed price mechanism in IPOs?

Book building avoids all risks associated with IPOs.

Book building prevents over-subscription of shares.

Book building allows flexibility in pricing.

Book building guarantees higher profits for investors.

What is the difference between transfer and transmission of shares?

Transfer requires stamp duty, while transmission doesn't.

Transfer results from death, while transmission is a deliberate act.

Transfer requires an instrument of transfer, while transmission requires evidence of entitlement.

Transfer involves the legal representative, while transmission involves the company's directors.

What is the purpose of certification of transfer of shares?

To transfer shares without any fees.

To provide a guarantee of the transferee's ownership.

To indicate that the certificate of shares has been lodged with the company.

To simplify the transfer process for partially paid shares.

In the case of listed securities, under what grounds can the directors refuse to register a transfer of shares?

If the transferor is a minor incapable of entering into a contract.

If the transfer is in contravention of any law.

If the transferor has not paid the due call money.

If the transferor is a debtor of the company.

What happens to a share that is transmitted due to the death of the shareholder?

The legal representative becomes personally liable for the share.

The share is automatically transferred to the company's directors.

The legal representative may choose to be registered as the holder of the share.

Why is book building considered an efficient method for pricing securities?

Book building guarantees a fixed price for securities.

Book building prevents investors from bidding too low.

Book building allows companies to set the price without market input.

Book building considers market demand and sets a price range for securities.

Share Capital- 1 Free MCQ Practice Test with Solutions

	Company Law 81 docs\|44 tests

	Company Law 81 docs\|44 tests

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