Underwriting of Shares and Debentures MCQ’s | Financial Accounting (Free Resource)
Underwriting of Shares and Debentures MCQ’s
1. The underwriting commission in case of debentures as per the Companies Act shall not exceed
(a) 5 percent of issue price
(b) 10 percent of the issue price
(c) 2.5 percent of the issue price
(d) 2 per cent of the issue price
2. As per SEBI guidelines, the underwriting commission on equity shares
(a) 10 per cent of the issue price
(b) 5 per cent of the issue price
(c) 2.5 per cent of the issue price
(d) 2 per cent of the issue price
3. The underwriting commission in case of Rs 4 lakh preference shares capital subscribed to by the public, under Ministry of Finance guidelines, should not exceed
(a) 2.5 per cent
(b) 1 per cent
(c) 2.0 per cent
(d) 1.5 per cent
4. According to the Companies Act the underwriting commission on shares should not exceed
(a) 5 per cent
(b) 2.5 per cent
(c) 10 per cent
(d) 1 per cent
5. The underwriting commission is calculated on
(a) net liability of the share value
(b) firm underwriting value of the shares
(c) marked application of the share value
(d) issue price of the shares underwritten
6. Unmarked applications refer to
(a) Firm underwriting
(b) Applications issued by the company
(c) Applications bearing the stamp of underwriter
(d) Applications from the public received directly by the company without bearing any stamp of underwriter
7. When all the shares are underwritten by the underwriters, it is called
(a) Firm underwriting
(b) Partial underwriting
(c) Complete underwriting
(d) None of the above
8. Marked applications refer to
(a) Applications bearing the seal of underwriting
(b) Applications bearing the signature of applicants
(c) Applications issued by company
(d) None of the above.
9. R Limited issued a debenture of Rs 100 each at Rs 90. The underwriting commission will be paid on
(a) Rs 100
(b) Rs 95
(c) Rs 105
(d) Rs 90
10. M Limited issued shares at a face Value of Rs 100 with a premium of Rs 20 per share. The underwriting commission will be calculated on
(a) Rs 100
(b) Rs 90
(c) Rs 80
(d) Rs 120
| Answers: 1)2.5 percent of the issue price 2)2.5 percent of the issue price 3)1.5 per cent 4)5 per cent 5)issue price of the shares underwritten 6)Applications from the public received directly by the company without bearing any stamp of underwriter 7)Complete underwriting 8)Applications bearing the seal of underwriting 9)Rs 90 10)Rs 120 |
11. When the entire issue is underwritten by only one person, his liability will be equal to
(a) No. of shares underwritten
(b) No. of shares underwritten minus no. of shares applied for by the public
(c) No. of shares applied for by the public
(d) None of the above
12. Marked applications refers to
(a) Applications bearing the stamp of the underwriters
(b) Applications carrying the signatures of public who applied for shares
(c) Applications carrying the stamp of company which offered the shares
(d) None of the above
13. Unmarked applications refers to
(a) Applications bearing the stamp of the underwriters
(b) Applications from public received directly by the company without bearing any stamp of underwriters
(c) Applications issued by the company to underwriters
(d) None of the above
14. The underwriter is entitled to claim remuneration on
(a) the issue price of shares underwritten
(b) the face value of shares actually purchased
(c) the face value of shares not purchased by him
(d) None of the above
15. If the whole of the issue of shares or debentures is underwritten it is known as
(a) Partial underwriting
(b) Sole underwriting
(c) Complete or Full underwriting
(d) None of the above
16. If a part of the issue of shares or debentures is underwritten, it is termed as
(a) Partial underwriting
(b) Complete underwriting
(c) Firm underwriting
(d) None of the above
17. When an underwriter agrees to buy a definite number of shares in addition to unsubscribed shares, it is termed as
(a) Partial underwriting
(b) Firm underwriting
(c) Complete underwriting
(d) None of the above
18. According to the Companies Act, the commission payable to underwriter for underwriting shares should not exceed
(a) 5%
(b) 10%
(c) 2.5%
(d) 1.5%
19. Commission for underwriting shares as per the guidelines issued by the Stock Exchange division of the Dept. of Economic Affairs, Ministry of Finance (F 14/1/SE/85-7-5-85) and also as per SEBI guidelines should not exceed
(a) 5%
(b) 2.5%
(c) 10%
(d) 1.5%
20. The underwriting commission in the case of debentures as per Companies Act, should not exceed:
(a) 5% of the price at which debentures are issued
(b) 4% of the price at which debentures are issued
(c) 2½% of the price at which the debentures are issued
(d) None of the above
| Answers: 11)No. of shares underwritten minus no. of shares applied for by the public 12)Applications bearing the stamp of the underwriters 13)Applications from public received directly by the company without bearing any stamp of underwriters 14)the issue price of shares underwritten 15)Complete or Full underwriting 16)Partial underwriting 17)Firm underwriting 18)5% 19)2.5% 20)2½% of the price at which the debentures are issued |
21. As per SEBI guidelines, commission payable to underwriters for underwriting Preference shares or Debentures upto Rs 5 lakhs, should not exceed
(a) 5%
(b) 2.5%
(c) 10%
(d) 1.5%
22. The Underwriting Commission in case of Preference Shares / Debentures beyond Rs 5 lakhs as per SEBI guidelines, should not exceed
(a) 2%
(b) 2.5%
(c) 5%
(d) 1.5%
23. K Ltd. issued shares of Rs 1,000 each at Rs 950. The Underwriting Commission will be paid on
(a) Rs 1,000
(b) Rs 950
(c) Rs 1,950
(d) Rs 50
| Answer: 21)2.5% 22)2% 23)Rs 950 |
