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- 1. Multiple Choice
Which the following is true in relation to a new issue of shares?
The ACCC requires a prospectus to be lodged
A prospectus must be lodged with ASIC
A prospectus must be lodged with the Australian Tax Office
No prospectus is required to be lodged
- 2. Multiple Choice
Why would a business select debentures as a source of funding?
To increase financial risk
To provide security over current liabilities
To avoid dilution of ownership
To manage short term cashflow needs
- 3. Multiple Choice
Where interest rates significantly increase, which of the following is true?
Debt funds become more available
Debt funds become cheaper to obtain
Business may require equity finance
Factoring increases
- 4. Multiple Choice
Which of the following would be appropriate for long term debt finance?
Commercial Bills
Unsecured notes
Factoring
Overdraft
- 5. Multiple Choice
A toy store has seasonal cash flow problems. Which of the following sources of finance would be most appropriate to address those issues:
Offering discount for early payment
Overdraft
debenture
Rights issue
- 6. Multiple Choice
Which of the following is true in relation to equity financing?
Equity finance must be repaid
Interest payments are low
Existing shareholders are diluted
Dividends are tax deductible
- 7. Multiple Choice
Which of the following is not a purchaser of new issues of shares?
Australian Securities Exchange
Superannuation Funds
Life Insurance Companies
Banks
- 8. Multiple Choice
An Australian bank is purchasing a Malaysian bank for $2 billion. Which of the following would be the most appropriate source of finance for the acquisition:
Rights Issue
Overdraft
Leasing
Share purchase plan
- 9. Multiple Choice
A company offers existing shareholders an opportunity to purchase up to fight $15,000 in new shares of the company. This is an example of which of the following:
Placement
New share issue
Rights Issue
Share purchase plan
- 10. Multiple Choice
A business issues shares for $10 million to a large investment bank. This is an example of which of the following?
Rights Issue
Placement
Share Purchase Plans
Mortgage
- 11. Multiple Choice
Which of the following is true in relation to dividends?
Dividends are often tax deductible
Dividends are usually tax deductible
Businesses must pay dividends to shareholders every year
Dividends are not tax deductible
- 12. Multiple Choice
In relation to the availability of funds in a recession, which of the following is true?
Increase loans are available from banks
New issues of shares are often over prescribed
Company Tax rates are reduced
Availability of credit decreases
- 13. Multiple Choice
Which of the following is true in relation to private equity as a source of finance?
Private holders are not long term holders of equity
Private equity are a short term lender
Private equity are a source of finance to address short term cash flow problems
Private equity are a source of lease finance
- 14. Multiple Choice
A business sells accounts receivable at a discount to improve cash flow. This is an example of which of the following?
Overdraft
factoring
Unsecured notes
Commercial Bills
- 15. Multiple Choice
A business is proposing to issue shares to existing shareholders, one new share for every four currently held. This is an example of which of the following:
Placement
New Share Issue
Rights Issue
Share Purchase Plan
- 16. Multiple Choice
Which of the following would be appropriate to address a short term financial need
Commercial Bills
Debentures
Mortgage
Leasing
- 17. Multiple Choice
Which of the following is a long term debt source for a large business expansion?
Overdraft
Mortgage
New Issue of Shares
Share Purchase Plan
- 18. Multiple Choice
Which of the following sources of finance do not require a prospectus to be issued?
New Issue and rights Issue
Placement and rights issue
New Issue and placement
Placement and share purchase plan
- 19. Multiple Choice
Which of the following is a characteristic of external equity finance?
A fixed mature date
Variable Interest payments
Fixed returns
Dilution of existing shareholders
- 20. Multiple Choice
What is a source of new capital for a listed company?
A primary market of the Australian Securities Exchange
Primary market of the Australian Competition and Consumer Commission
Secondary market of the Australian Investment and Securities Commission
Secondary market of the Australian Securities Exchange
- 21. Multiple Choice
Which of the following is a long-term form of finance that requires security to be provided to the lender?
Unsecured notes
Factoring
Commercial Bills
Mortgage
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