6 Questions
What are the three methods through which a company can raise capital?
Debt capital, self-funding, and equity capital
What was the outcome of the Trevor v Whitworth case?
The executors claimed a sum of £2,873.12 from the liquidator after the company went into liquidation
What is the purpose of the capital maintenance rule or doctrine?
All of the above
What did Lord Hershell state in the Trevor v Whitworth case?
The rationale of the decision was that the creditors had no right to rely on the capital of the company undiminished by any expenditure outside the limits
What is the Solvency Requirement under the CA 2016?
A statement made by each of the directors that the company satisfies the solvency test in relation to the transaction
What was the provision in the articles of the company in the Trevor v Whitworth case?
The company could purchase its own shares from any person willing to sell it at a price not exceeding the then marketable value thereof
Study Notes
In this quiz, you will be tested on your knowledge of capital raising methods used by companies. You will learn about the different ways companies can raise capital, including debt capital, self-funding, and equity capital. Additionally, you will explore the rules and restrictions surrounding the usage of equity capital raised from shareholders. Test your knowledge and see how well you understand these essential concepts for businesses.
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