🧩 Chapter 7: Corporate Actions — Mock Questions

-

 

Q1. A dividend is typically paid out of:

A. Capital reserves
B. Revaluation reserves
C. Current or accumulated profits
D. Share premium only


Answer: C
✔ Dividend distribution is from profits earned.

Q2. When a company issues bonus shares, it results in:

A. Increase in total capital without cash outflow
B. Cash outflow from company
C. Reduction in number of shares
D. Debt repayment


Answer: A
✔ Bonus issue converts reserves into share capital — no cash flow.

Q3. Stock split primarily aims to:

A. Reduce market liquidity
B. Increase share price
C. Make stock more affordable by reducing face value
D. Reduce number of shareholders


Answer: C
✔ Split lowers face value and share price → improves liquidity.

Q4. In a rights issue, shares are offered to:

A. General public only
B. Promoters only
C. Existing shareholders
D. Government only


Answer: C
✔ Rights = offered to current shareholders in proportion to holdings.

Q5. Which corporate action involves cash outflow from a company?

A. Bonus issue
B. Stock split
C. Dividend payout
D. ESOP allotment


Answer: C
✔ Dividend distribution requires cash payment.

Q6. Ex-dividend date is the date on which:

A. Dividend is paid to shareholders
B. Shares trade without dividend eligibility
C. Dividend is declared
D. Shares are allotted


Answer: B
✔ Buy before ex-date to be eligible for dividend.

Q7. Record date refers to the date when:

A. Stock exchange settles trades
B. Company identifies eligible shareholders for benefits
C. Dividend is credited
D. Board announces bonus issue


Answer: B
✔ Shareholders on record date receive benefits like dividend/bonus.

Q8. A share buyback generally leads to:

A. Increase in number of shares
B. Reduction in outstanding equity capital
C. Dilution of ownership
D. Profit reduction only


Answer: B
✔ Buyback reduces share count → increases EPS if profits stable.

Q9. Bonus issue affects:

A. Market capitalization unchanged
B. Equity capital decreases
C. Cash outflow increases
D. EPS increases automatically


Answer: A
✔ Bonus increases shares but not overall valuation.

Q10. If a company splits shares in ratio 1:5, a shareholder owning 100 shares will now hold:

A. 100
B. 120
C. 200
D. 500


Answer: D
✔ 1:5 split → each share becomes 5 shares.
100 × 5 = 500.

Q11. A company offering rights in ratio 1:2 means:

A. 1 bonus for every 2 shares
B. 1 right share for every 2 held
C. 2 shares for every one held
D. Dividend of 1.2%


Answer: B
✔ If you own 2 shares → entitled to buy 1 extra share at offer price.

Q12. Which corporate action dilutes EPS if no new profit is added?

A. Buyback
B. Bonus share
C. Reverse split
D. Dividend payout


Answer: B
✔ Bonus increases share count → EPS falls if profit constant.

Q13. A reverse stock split results in:

A. Lower share price
B. Higher face value & fewer shares
C. More outstanding shares
D. Higher liquidity


Answer: B
✔ Reverse split consolidates shares → increases price per share.

Q14. Which action is usually seen as a positive signal of excess cash reserves?

A. Dividend payment
B. Delayed projects
C. Promoter pledge
D. Rights issue


Answer: A
✔ Companies pay dividends when cash flows are strong.

Q15. Which of the following corporate actions is mandatory for existing shareholders?

A. Buyback
B. Rights Issue (optional to subscribe)
C. Bonus Issue (automatic)
D. Preferential allotment


Answer: C
✔ Bonus shares automatically credited to eligible shareholders.

Comments

Post a Comment

Popular posts from this blog

🇮🇳 Bihari Words Part 2: More Funny & Savage Bhojpuri Slang You’ll Love! 😂🔥

-
Image
  The charm of Bihar isn’t just in its food, festivals, or people — it’s in its language! Every word in the Bihari dialect (especially Bhojpuri) carries emotion, drama, and humor. You can’t just hear it — you have to feel it! ❤️ So here’s Part 2 of our most loved Bihari words — from the ones that’ll make you laugh 😆 to the ones that’ll make you go, “Aree wah! Ee ta mast ba!” 🙌 💬 More Funny Bihari Words with Meanings 🗣️ Bihari Word 💡 Meaning (in English) 🤓 Usage/Feeling Bhaklol Foolish / Silly “Arey bhaklol ho gaya ka?” (Have you gone nuts?) 🤪 Lappan Lazy person “Ee lappan kab uthbe?” (When will this lazy one wake up?) 😴 Phat gayi Got scared “Result dekh ke ta phat gayi!” (I got scared after seeing the result!) 😅 Jhakmaar Show-off / Overacting person “Kitna jhakmaar hai ee!” (What a drama queen!) 🎭 Chapraasi Informal word for messenger or helper Often used teasingly 😜 Chappal maar denge We’ll hit you with slippers Said jokingly but with emotion 😂 Ghochu Dumb / I...
Read more

NISM Research Analyst Mock Test 2025 – Free Chapter-Wise Practice Questions

-
 Chapter 1: Introduction to Research Analyst Profession — Mock Questions Q1. The primary role of a Research Analyst is to: A. Provide investment advice to clients directly B. Conduct research and make recommendations based on analysis C. Trade on behalf of clients D. Manage portfolios ✅ Answer: B Explanation: A research analyst studies securities, industries, and markets to provide insights and recommendations — not to trade or manage portfolios directly. Q2. Which of the following is NOT a typical function of a research analyst? A. Data collection and analysis B. Forecasting company performance C. Execution of client trades D. Writing research reports ✅ Answer: C Explanation: Analysts do not execute trades — that’s done by brokers or dealers. Q3. Sell-side analysts are typically employed by: A. Mutual funds B. Portfolio management companies C. Brokerage or investment banks D. Insurance companies ✅ Answer: C Explanation: Sell-side analysts work for brokerag...
Read more

Why Employees Quit — and How HR Can Build a Culture That Makes Them Stay

-
Image
Learn how HR can boost employee satisfaction through better communication, purpose, care, work-life balance, and involvement in decisions. Employees play a vital role in the formation and success of any organization. However employees are often neglected and the company wants them to work more and more, they end up quitting the job because of lack of appreciation and rewards. So in order to make them satisfied and happy being an HR,  implement certain policies to create values for the company and society: 🌟 Employees: The Heartbeat of Every Successful Organization Employees are the foundation of every thriving company. Yet too often, they’re expected to work harder without appreciation or recognition. Over time, this leads to frustration, disengagement, and ultimately — resignation. As HR professionals, our responsibility goes beyond recruitment and payroll. We must create an environment where employees feel valued, heard, and motivated. Here are five key HR strategi...
Read more