1. The safest form of investment in a limited company is in:

A. longterm debentures

B. ordinary shares

C. preference shares

D. short term debentures

2. A private limited company may NOT:

A. issue bonus shares

B. issue debentures

C. make a rights issue

D. list on the stock exchange

3. Which of the following would NOT be considered a capital reserve? *

A. Revaluation reserve

B. Profit and loss account

C. Share premium

D. Capital redemption reserve

4. A company's dividend policy is influenced by all of the following EXCEPT: *

A. the availability of liquid funds

B. the availability of distributable profits

C. a balance between dividend growth and capital growth

D. the availability of share premium balance

5. The maximum amount of capital available for issue as stated in the company's Articles of Incorporation is called the: *

A. called-up share capital

B. paid up capital

C. authorized share capital

D. issued share capital

6. Which of the following resulted in the share premium of $5 000?

A. Ordinary shares were sold at par value

B. Ordinary shares were sold below par value

C. Ordinary shares were sold at nominal value

D. Ordinary shares were sold at above par value

7. A private limited company may NOT:

A. issue bonus shares

B. issue debentures

C. make a rights issue

D. list on the stock exchange