Choose the correct answer for each question.

1. Market capitalisation of a listed company is obtained by:

   1.   ?    taking an average of stockbrokers' estimates of company value
   2.   ?    multiplying the number of shares in issue by the current share price
   3.   ?    multiplying the number of shares in issue by their nominal value
   4.   ?    looking at the company's financial statements

2. Which two of the following statements about company share capital are true.

   1. The ordinary shares of companies are often referred to as equity shares
   2. The shareholders of private companies are able to sell their shares via the stock market
   3. The shares of all public limited companies (plcs) are quoted on the stock market
   4. The nominal value of a share is not usually the same as its market value
   Check

3. Who decides on the amount of a listed company's dividend?

   1. the Stock Exchange
   2. the company's shareholders at the Annual General Meeting
   3. the company's chief executive
   4. the company's directors
   Check

4. Which one of the following statements about the London Stock Exchange is correct:

   1. its secondary market function assists buyers and sellers to trade in commodities
   2. its secondary market function is also known as the Alternative Investment Market
   3. companies wishing to obtain a listing on its main market must have been in business for at least three years
   4. companies wishing to obtain a listing on its main market must already be
   Check

5. Which of the following is correct?

   1. the share price of a quoted company can be obtained freely from many sources including the London Stock Exchange itself
   2. the share prices of many unlisted companies are available through the London Stock Exchange's website
   3. information about share prices of companies listed on AIM is available only to institutional investors and not to private shareholders
   4. none of the above
   Check

6. Which three of the six statements about company flotation are correct:

   1. An offer for sale of shares is an offer to the general public and institutions to buy shares
   2. An offer for sale of shares is an offer to a select group of financial institutions only
   3. A placing of shares involves placing the shares in the general stock market for anyone to buy
   4. A placing of shares involves arranging to sell shares to specific investors and institutions
   5. A company listed on the stock exchange prepares a prospectus every year in order to explain its plans for the future to potential and existing investors
   6. A prospectus is prepared only when shares are made available for purchase by the general public and the financial institutions
      
   Check

7. Farnham & Fairweather plc is a company listed on the Alternative Investment Market. It has in issue 1 400 000 shares with a nominal value of 75p. The shares are currently trading at 105p. What is the company's market capitalisation?

   1. £1 400 000
   2. £1 470 000
   3. £1 050 000
   4. £1 740 000
   Check

8. Which of the following statements about listed companies is true?

   1. Listed companies are required to produce interim financial statements
   2. Listed companies which are approved by the Stock Exchange are permitted to dispense with the requirement to have an annual audit
   3. Listed companies are required by law to publish their full financial statements on their websites
   4. Listed companies can opt not to publish full financial statements if they are currently subject to a hostile takeover bid
   Check