242 15: Share capital Part E Capital and the financing of companies
Answers to Quick Quiz
1 False. The company may decide not to pay any dividend, or may be unable to because it does not have any
distributable profits. What the preference shareholders have is a right to receive their dividends before
other dividends are paid or declared.
2 A and D are implied rights; the others have to be stated explicitly.
3 B. The shares must be first offered to existing members whether the company is public or private.
4 A. All companies must have a minimum of one member.
5 True. Both are acceptable uses for the share premium account.(^) Now try the questions below from the Practice Question Bank
Number
33, 34