When No-Par Share Is Issued

question 104

Multiple Choice

When no-par share is issued:

• A) The entire amount received is credited to the Share Premium account.
• B) The issue price is credited to the Share Capital account.
• C) There is no legal capital created because there is no par or stated value.
• D) The transaction usually involves only an exchange for non-cash assets or services, since the share has no value on the share exchanges.

---

Definitions:

Maturity

The finite time at which a financial instrument, such as a bond or loan, reaches its expiration date and the principal is to be paid back.

Cost of Equity

The expected return on investment required by shareholders, representing the compensation for investing in a company's equity and assuming the associated risk.

Market Return

The total return on an investment or portfolio over a given period, including capital gains and dividends, relative to the overall market.

Beta

A measure of a stock's volatility in relation to the overall market, indicating its sensitivity to market movements.