Question 1

Which of the following is not an advantage of raising equity via the issue of ordinary shares?

Accepted Answer

A) Dividend payment is not an obligation. 
B) It reduces borrowing costs. 
C) Borrowing entails higher transaction costs than raising equity,as the company has to prepare disclosure documents to attract lenders. 
D) None of the given options. 
A) Dividend payment is not an obligation. 
B) It reduces borrowing costs. 
C) Borrowing entails higher transaction costs than raising equity,as the company has to prepare disclosure documents to attract lenders. 
D) None of the given options.

Question 2

Which of the following do not affect shareholders' wealth?

Accepted Answer

A) Rights issues. 
B) Private placements. 
C) Announcements of rights issues. 
D) All the given options. 
A) Rights issues. 
B) Private placements. 
C) Announcements of rights issues. 
D) All the given options.

Question 3

Which of the following statements is true?

Accepted Answer

A) Companies cannot issue shares at less than par value. 
B) Companies can issue shares at a premium to par value. 
C) Ordinary shareholders have a residual claim on the proceeds from liquidation. 
D) Limited liability means that shareholders can only lose the paid-up value of their shares. 
A) Companies cannot issue shares at less than par value. 
B) Companies can issue shares at a premium to par value. 
C) Ordinary shareholders have a residual claim on the proceeds from liquidation. 
D) Limited liability means that shareholders can only lose the paid-up value of their shares.

Question 4

Limited liability share issues are restricted to companies in the _____________ industry.

Accepted Answer

The answer of Limited liability share issues are restricted to...

Question 5

An offer of securities to investors cannot proceed until a disclosure document has been lodged with:

Accepted Answer

A) the ASX. 
B) APPRA. 
C) ASIC. 
D) all of the given options. 
A) the ASX. 
B) APPRA. 
C) ASIC. 
D) all of the given options.

Question 6

Evidence from Australia is that IPO's are generally under priced.

Accepted Answer

A) True 
 B)False

Question 7

Private equity investments typically have:

Accepted Answer

A) a higher level of risk than most other investments. 
B) a lower level of risk than most other investments. 
C) 30 per cent more risk than most other investments. 
D) a similar risk to most other investments. 
A) a higher level of risk than most other investments. 
B) a lower level of risk than most other investments. 
C) 30 per cent more risk than most other investments. 
D) a similar risk to most other investments.

Question 8

IPOs are generally underpriced because:

Accepted Answer

A) informed investors will avoid overpriced stocks,thereby resulting in lower demand,which will also deter wary uninformed investors. 
B) it is very difficult to set an offer price for a new company. 
C) shares of new company are illiquid. 
D) none of the given options. 
A) informed investors will avoid overpriced stocks,thereby resulting in lower demand,which will also deter wary uninformed investors. 
B) it is very difficult to set an offer price for a new company. 
C) shares of new company are illiquid. 
D) none of the given options.

Question 9

Venture capitalists can dispose of their investment via:

Accepted Answer

A) a sale. 
B) a private placement. 
C) an involuntary liquidation. 
D) either a sale or an involuntary liquidation. 
A) a sale. 
B) a private placement. 
C) an involuntary liquidation. 
D) either a sale or an involuntary liquidation.

Question 10

If all shareholders take up a rights issue with a subscription price less than the share price,then there will be a net increase in wealth to all investors.

Accepted Answer

A) True 
 B)False

Question 11

Which act requires that the rights of preference shareholders be fully stated in the company's constitution?

Accepted Answer

A) Corporations Law 2001. 
B) Corporations Act 2000. 
C) Corporations Act 2001. 
D) Corporations Act 1999. 
A) Corporations Law 2001. 
B) Corporations Act 2000. 
C) Corporations Act 2001. 
D) Corporations Act 1999.

Which of the following is not an advantage of raising equity via the issue of ordinary shares?

Which of the following do not affect shareholders' wealth?

Which of the following statements is true?

Limited liability share issues are restricted to companies in the _____________ industry.

An offer of securities to investors cannot proceed until a disclosure document has been lodged with:

Evidence from Australia is that IPO's are generally under priced.

Private equity investments typically have:

IPOs are generally underpriced because:

Venture capitalists can dispose of their investment via:

If all shareholders take up a rights issue with a subscription price less than the share price,then there will be a net increase in wealth to all investors.

Which act requires that the rights of preference shareholders be fully stated in the company's constitution?

Introduction

Consumption, Investment and the Capital Market

The Time Value of Money: An Introduction to Financial Mathematics

Applying the Time Value of Money to Security Valuation

Project Evaluation: Principles and Methods

The Application of Project Evaluation Methods

Risk and Return

The Capital Market

Sources of Finance: Debt

Payout Policy

Principles of Capital Structure

Capital Structure Decisions

The Cost of Capital and Taxation Issues in Project Evaluation

Leasing and Other Equipment Finance

Capital Market Efficiency

Futures Contracts

Options and Contingent Claims

Analysis of Takeovers

International Financial Management

Management of Short-Term Assets: Inventory

Management of Short-Term Assets: Liquid Assets and Accounts Receivable

Filters

Exam 9: Sources of Finance: Equity

Which of the following is not an advantage of raising equity via the issue of ordinary shares?

Which of the following do not affect shareholders' wealth?

Which of the following statements is true?

Limited liability share issues are restricted to companies in the _____________ industry.

An offer of securities to investors cannot proceed until a disclosure document has been lodged with:

Evidence from Australia is that IPO's are generally under priced.

Private equity investments typically have:

IPOs are generally underpriced because:

Venture capitalists can dispose of their investment via:

If all shareholders take up a rights issue with a subscription price less than the share price,then there will be a net increase in wealth to all investors.

Which act requires that the rights of preference shareholders be fully stated in the company's constitution?

Introduction

Consumption, Investment and the Capital Market

The Time Value of Money: An Introduction to Financial Mathematics

Applying the Time Value of Money to Security Valuation

Project Evaluation: Principles and Methods

The Application of Project Evaluation Methods

Risk and Return

The Capital Market

Sources of Finance: Debt

Payout Policy

Principles of Capital Structure

Capital Structure Decisions

The Cost of Capital and Taxation Issues in Project Evaluation

Leasing and Other Equipment Finance

Capital Market Efficiency

Futures Contracts

Options and Contingent Claims

Analysis of Takeovers

International Financial Management

Management of Short-Term Assets: Inventory

Management of Short-Term Assets: Liquid Assets and Accounts Receivable

Filters