What is the purpose of issuing bonus shares?

To increase shareholder funds without affecting reserves.

To reduce share capital and increase dividends.

To stabilize share prices by increasing speculation.

To repay obligations and maintain working capital.

Which type of shares does not carry the right to get additional dividend?

Participating Preference Shares

Non-participating Preference Shares

What is the main purpose of creating a Capital Redemption Reserve account?

To increase the dividend payouts to shareholders.

To maintain working capital for the company.

To protect the interest of creditors and replenish working capital.

To finance the redemption of preference shares.

Which condition must be met for redeeming preference shares as per the Companies Act, 1956?

The shares must be redeemed at a discount.

The shares must be redeemed using capital reserve funds.

The shares must be fully paid up.

The shares must be converted into equity shares.

What is the effect of issuing bonus shares on shareholder dividends?

Dividends decrease due to increased share capital.

Dividends increase due to higher reserves.

Dividends remain unchanged as bonus shares don't affect reserves.

Dividends fluctuate based on share price changes.

What is the significance of issuing redeemable preference shares?

It reduces the need for equity shares.

It ensures a fixed dividend to preference shareholders.

It increases the company's total capital.

It stabilizes share prices by discouraging speculation.

How can the company utilize the Capital Redemption Reserve account?

To repay obligations and increase shareholder dividends.

To maintain working capital and protect creditors' interests.

To issue bonus shares and finance new projects.

To fund the redemption of equity shares.

What is the impact of redeeming preference shares on creditors and working capital?

It protects creditors' interests and replenishes working capital.

It depletes working capital and benefits creditors.

It increases the company's liabilities and reduces profits.

It reduces the need for working capital.

What is the primary purpose of issuing bonus shares to shareholders?

To increase the company's reserves and surplus.

To reduce the company's overall share capital.

To increase the number of outstanding shares.

To attract new investors and boost share prices.

Which type of preference shares carries the right to participate in surplus profits?

Non-participating Preference Shares

Participating Preference Shares

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Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - B Com MCQ

10 Questions MCQ Test - Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4

What is the purpose of issuing bonus shares?

Which type of shares does not carry the right to get additional dividend?

What is the main purpose of creating a Capital Redemption Reserve account?

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Important Questions for Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4

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