Which of the Following Is Not a Reason for a Company

question 20

Multiple Choice

Which of the following is not a reason for a company making a bonus issue of shares?

• A)To use cash.
• B)As a signal to the market of the company's confidence in its future.
• C)To reduce its share price when it has become too high.
• D)None of the above, i.e., all are reasons for making a bonus issue.

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Definitions:

Shareholder Wealth

The overall value for shareholders; it is often measured by the share price of a company multiplied by the number of shares outstanding.

Stock Accounts

Investment accounts that hold shares of various companies, allowing investors to own a part of these entities and possibly earn dividends or benefit from stock price appreciation.

Stock Split

A corporate action that increases the number of shares in a company through the division of its existing shares.

Trading Range

The spread between the high and low prices at which a stock or other financial instrument trades over a particular period of time.