Sam has decided that he will form a company, Smart Sports Ltd, and aims to raise £50,000 from the issue of ordinary shares.

a) Would you recommend that the company issue 50,000 shares of £1 nominal value, 5,000 shares of £10 nominal value, or 500 shares of £100 nominal value? Explain your answer.

b) Shares are normally issued at nominal value when a company is formed.
When might shares be issued at a price greater than nominal value?

c) Sam’s mother, Betty, has never previously owned shares in a company.
Explain the benefits that such an investment might bring and the possible drawbacks.

d) How might Betty find a buyer for her shares in a few years’ time?