MCQ on Right issue and Bonus issue of Shares

MCQ on Right issue and Bonus issue of Shares



UPDATED AS ON 04-03-2020

1. As per section 81, Rights shares are issued after two years from the formation of a company or the expiry of one year from the first allotment of shares in the company whichever is earlier.                                                   True

2. Right shares are first offered to the existing share holders.                                     True

3. Right share are not offered to the existing equity shareholders if:
a.       The company in general meeting has so decided by a special resolution
b.      Decided by an ordinary resolution and same has been approved by the central government
c.       Right shares are offered to existing shareholders only.
d.      Both a and b.


4. As per SEBI guidelines right issue should not be kept open for more than 60 days.                        True

5.  Section 81 is not applicable to:

a.       A private company
b.      Conversion of debenture into shares
c.       Option to subscribe for shares in the company attached to debentures issued or loan raised by the company
d.      All of the above.

(a) Theoretical market price after right issue
a.       30
b.      30.25
c.       30.63
d.      31

(b) Value of Rights
a.       9.11
b.      9.37
c.       9.50
d.      9.67

(c) Percentage increase in share capital:
a.       40%
b.      50%
c.       60%
d.      70%

(d) Percentage increase in total funds:
a.       80%
b.      90%
c.       75%
d.      100%

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