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9 When a company sells the right to buy a certain number of shares in the company at a pre- determined price at or up to some fixed time in the future, that right is known as a A) bonus issue call option B) redeemable preference share D) private issue 10) Which of the following is an example of a share issue cost? A) stamp duty O) registration fees B) legal fees D) all of the above 12) 13) 14) The buying back of a financial liability or equity instrument is referred to as: A) call B) allotment D) redemption 15) When there are applications for more shares than are available for purchase, it is referred as a/an A) under subscription B) underwritten issue D) forfeiture 16) The journal entry used to record money due on the allotment of shares is A) Debit Allotment Credit Share Capital B) Debit Bank Credit Share Capital C) Debit Share Capital Credit Allotment D) Debit Allotment Credit Application 17) A form of debt which can be converted to shares after a set period of time is referred to as a A) unsecured note C) mortgage B) lease D) convertible note 18) 19) Which of the following is a major advantage of public companies? A) being able to invite the public to invest in them through the subscription to share or debt capital B) being subject to more govermment regulation than proprietary companies C being subject to less government regulation than proprietary companies D) none of the above 20) Which of the following is a characteristic of preference shares? A) they may have restricted voting rights E) they have an entitlement to assets remaining after all obligations have been satisfied C) they may be preferential as to return of capital D) both A and C

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