What is a share as defined in Section 2(84) of the Companies Act?

A share is a share in the share capital of a company, including stock unless a distinction is stated.

Fill in the blank: A share is a right to participate in the profits of a company while it is a going concern and in the ___ of the company.

Winding up

True or False: A share can be considered as merely a sum of money.

False. A share is a bundle of rights and liabilities, not just a sum of money.

Explain the process of book building in an IPO.

Book building helps determine IPO pricing.

• Companies set a price range.

• Investors submit bids based on demand.

• Final price reflects weighted average bids.

Fill in the blank: The final price at which securities are offered after the book building process is called the ___ price.

Cut-off

What is the primary objective of a share buyback program?

To reduce the supply of stock, thereby increasing its price and improving earnings per share.

True or False: The transfer of shares in a private company is less strict than in a public company.

False. The transfer of shares in a public company is less strict than in a private company.

Define 'Employee Stock Option' as per the Companies Act.

An employee stock option is the option given to employees to purchase shares of the company at a future date at a predetermined price.

Fill in the blank: The amount received from premiums on shares must be transferred to the ___ account.

Securities premium

What conditions must be satisfied for a company to issue shares at a discount?

The shares must belong to a class already issued, the discount should not exceed 10%, and a resolution must be passed by the company.

How does issuing bonus shares affect the market value of existing shares?

The market value of the company’s shares comes down to their nominal value as the number of shares increases.