1) What is limited liability a) Personal assets of the owners are at risk as well as the business b) Only the business is at risk c) Only their personal assets are at risk 2) What is market capitalisation a) The value the stock market places on the whole business b) Same as market value 3) What are dividends a) Monthly rewards to shareholders for their investments into the business b) Annual rewards to shareholders for their investments into the business c) Quarterly rewards to shareholders for their investments into the business 4) An important issue with share dividends is that there are trade offs. a) True b) False 5) Ordinary shares are also known as 'uncommon stock' a) True b) False 6) Every company has ordinary share capital that has been issued to at least one shareholder a) True b) False 7) Why would a company drop dividends (positive reason) a) Bad year of trading b) Because of financial challenges c) Declining earnings d) Stock buyback e) Debt 8) An annual general meeting asks who to come to quiz the board? a) Stakeholders b) Shareholders c) Managers d) Employees e) Customers 9) Market capitalism formula a) Share Price x Number of Shares Issued b) Share Price / Number of Shares Issued

Business Chapter 3

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