The Effect of a Bonus Issue to All Shareholders on (A)net

question 65

Multiple Choice

The effect of a bonus issue to all shareholders on (a) net asset backing per share,(b) each shareholder's share of net assets and (c) market capitalisation is:

• A) (a) The net asset backing per share will decrease; (b) each shareholder's share of net assets will remain the same; (c) evidence suggests that on average the market capitalisation will increase.
• B) (a) The net asset backing per share will increase; (b) each shareholder's share of net assets will increase; (c) evidence suggests that on average the market capitalisation will remain the same.
• C) (a) The net asset backing per share will decrease; (b) each shareholder's share of net assets will decrease; (c) evidence suggests that on average the market capitalisation will remain the same.
• D) (a) The net asset backing per share will remain the same; (b) each shareholder's share of net assets will decrease; (c) evidence suggests that on average the market capitalisation will decrease.

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Definitions:

Individual Differences

Variations among individuals in terms of their behaviors, motives, perceptions, and cognitive abilities.

Controlled Processing

A type of mental processing that is deliberate, requiring effort and conscious attention.

Information Attention

The focus or concentration given to data or inputs from the environment.

Judicious Screening

The careful and wise examination or evaluation of potential candidates or factors, aiming to select the most suitable ones for a specific purpose.