Question : When a company is said to have made first time an offer or invited the general public to subscribe for its shares is known as:
Option 1: Issue of share at premium
Option 2: Initial Fund Offer
Option 3: Initial Public Offer
Option 4: None of the above
Correct Answer: Initial Public Offer
Solution : When a company seeks to generate money by selling securities or shares to the public for the first time, it announces an Initial Public Offer (IPO). An unlisted company is not listed on the stock exchange. To put it another way, an IPO is when securities are sold to the general public in the primary market.
Hence the correct answer is option 3.
Question : Which of the following statement is incorrect?
Option 1: Company issues capital to public through online system of stock exchange is known as private placement of shares.
Option 2: Company offers the new shares to existing shareholders in proportion of shares already held by them is known as rights issues
Option 3: Company invites public to apply for its securities through issues of prospectus it is known as offer through prospectus.
Question : A company may issue __________.
Option 1: Equity shares
Option 2: Preference shares
Option 3: Equity and preference share
Question : In order to lower the number of shares outstanding, a company will repurchase its own shares from the market. It is called-
Option 1: Issue of Shares
Option 2: Forfieted Shares
Option 3: Buy Back of Shares
Question : As per Section 53 of the Companies Act, 2013, the issue of shares at a discount shall be void, except in case of -
Option 1: A company may issue share at a discount to its creditors when its debt converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme.
Option 2: A company may issue share at a discount to its creditors when its debt converted into shares in pursuance of any statutory resolution plan or merger scheme.
Option 3: A company may issue share at a discount to its debtors when its debt converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme.
Option 4: None of the Above
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