Select the choice which best completes the statement, or answers the question, by clicking on the corresponding letter.
Which one of the following statements is correct? Grant finance is often an excellent source of finance because it:
Carries a low interest rate
Does not usually have to be repaid
Can be obtained without any formalities
Is never monitored subsequently by the granting authority
Two of the following statements about a charge in respect of a bank loan are correct:
1. A charge is a form of security for the lender 2. A charge only applies to loans taken out by sole traders 3. A charge means that the lender is entitled to take items of equivalent value to the loan in settlement of the debt 4. A charge cannot be enforced legally
Which statements are correct?
1 & 2
3 & 4
1 & 3
2 & 4
Faruk is starting up a small business, and has heard that grants are available for business start-ups in his area which has high unemployment. The grants are available to anyone who employs at least two people on a full-time basis or the equivalent number of part-time staff. He writes to you, a small business adviser, asking for advice. His letter includes the following statements:
Which of these statements is correct?
‘I’m worried about applying for a grant because I’ve heard that they always have to be repaid after two years’
‘At least a grant would be cheaper than a bank loan because there’s no interest to pay’
‘Another advantage of a grant is that I wouldn’t need to worry about writing a business plan – the bank manager told me that I’d definitely need one to support a bank loan application’
‘I suppose I could actually spend the grant on anything I like – once I’ve got it I don’t imagine anyone will check up on it’
Which of the following statements is correct? Market capitalisation of a listed company is obtained by:
taking an average of stockbrokers’ estimates of company value
multiplying the number of shares in issue by the current share price
multiplying the number of shares in issue by their nominal value
looking at the company’s financial statements
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
Which two statements are true?
1 & 2
1 & 4
2 & 3
3 & 4
Who decides on the amount of a listed company’s dividend?
the Stock Exchange
the company’s shareholders at the Annual General Meeting
the company’s chief executive
the company’s directors
One of the following statements about the London Stock Exchange is correct
its secondary market function assists buyers and sellers to trade in commodities
its secondary market function is also known as the Alternative Investment Market
companies wishing to obtain a listing on its main market must have been in business for at least three years
companies wishing to obtain a listing on its main market must already be listed on the Alternative Investment Market
Which of the following is correct?
the share price of a quoted company can be obtained freely from many sources including the London Stock Exchange itself
the share prices of many unlisted companies are available through the London Stock Exchange’s website
information about share prices of companies listed on AIM is available only to institutional investors and not to private shareholders
none of the above
Three of the following 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
Which three statements are correct?
2, 3 & 5
2, 4 & 6
1, 4 & 6
1, 3 & 5
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?