When a Newly Established Company Issues Shares for the First

question 57

Multiple Choice

When a newly established company issues shares for the first time, the directors will issue the shares at:

• A) the price of $1 per share.
• B) the market price.
• C) a price established in consultation with ASIC.
• D) the highest price that they expect that the shareholders will be prepared to pay.

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Definitions:

Informal Contract

A contract that requires no formalities. Also called simple contract.

Formal Contract

A contract that must have a special form or must be created in a specific manner.

Simple Contract

A contract that is not a formal contract. Also called an informal contract.

Third-Party Beneficiary

A third-party beneficiary is a person who, although not a party to the contract, stands to benefit from the contract's execution or has rights that can be enforced under the contract.