ACCA F4 - Corp and Business Law (ENG)

Part E Capital and the financing of companies  15: Share capital 241

Quick Quiz

1 If a company fails to pay preference shareholders their dividend, they can bring a court action to compel
the company to pay it.

True

False^

2 Which two of the following are implied rights of preference shareholders?

A The right to receive a dividend is cumulative.

B If the company goes into liquidation, preference shareholders are entitled to claim all arrears of

dividend from the liquidator.

C As well as rights to their preference dividends, preference shareholders can share equally in

dividends payable to ordinary shareholders.

D Preference shareholders have equal voting rights to ordinary shareholders.

3 If a company issues new ordinary shares for cash, the general rule is that:

A The shares must first be offered to existing members in the case of a public but not a private

company.

B The shares must first be offered to existing members whether the company is public or private.

C The shares must first be offered to existing members in the case of a private but not a public

company.

D The shares need not be issued to existing members.

4 What is the minimum number of members that a plc must have?

A One

B Two

C Three

D Four

5 A share premium account can be used for bonus issues of shares or issue costs for new share issues.

True

False^