Topic 19

Question 1

rights issue

Answer 1

• issue of shares for cash
• issued at discount to the current market price
• ‘rights’ offered to existing shareholders first

Question 2

bonus issue

Answer 2

• raise no funds

- increase its sharecapital

Question 3

redeemable preference shares

Answer 3

• entity will pay for the shares at a later stage

- liability

Question 4

irredeemable preference shares

Answer 4

• paid by apportions from the profits

- equity

Question 5

ordinary shares

Answer 5

• no right to fixed dividend
• shareholder - entitled to all profits
  - voting rights

Question 6

authorised capital

Answer 6

maximum amount of share capital that an entity can issue

Question 7

issued capital

Answer 7

value of share capital that has been issued to shareholders

Question 8

called up capital

Answer 8

company no paid in full immediately for the issued shares

Question 9

Paid up capital

Answer 9

amount of called up capital that has been paid

Question 10

retained earnings

Answer 10

op RE + Profit - Prior Year Final Div = cl RE

Question 11

dividends are paid from

Answer 11

retained earnings