A Shareholder in Company C Owns 1,000 Shares Bought for $1

question 32

Multiple Choice

A shareholder in Company C owns 1,000 shares bought for $1 each. The company decides to make a bonus issue of one new share for every two existing shares held. How many shares does the shareholder now have in Company C?

• A) 1,500 shares
• B) 2,000 shares
• C) 500 shares
• D) 1,000 shares

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Definitions:

Face Value

The nominal value of a security as stated by the issuer, often associated with bonds or par value of stocks.

Bond Issuance

The process by which a government or corporation raises funds by selling bonds to investors.

Interest Accrual

The process of recognizing interest expenses or interest income that has been incurred but not yet paid or received in cash.

Interest Payment

The amount paid by a borrower to a lender for the privilege of borrowing money, typically expressed as an annual percentage of the principal.