When a Share Price of a Company Has Increased Hugely

question 47

Multiple Choice

When a share price of a company has increased hugely compared to the prices of most other shares on the exchange and its liquidity has decreased,the directors may decide to:

• A) split the number of shares on issue.
• B) have a bonus issue.
• C) declare an increased dividend.
• D) lower the dividend.

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Definitions:

Federal Income Taxes

Taxes levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Uncollectible

Refers to accounts receivable that are considered to be uncollectable and are thus written off as a bad debt expense.

Cash Receipts

The collection of money (currency, checks, wire transfers) by a business from its customers or other parties.