Equity Capital Terms Quiz

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Which of the following represents the actual amount paid-up by the investors?

Paid-Up Capital (correct)
Subscribed Capital
Issued Capital
Par Value

What is the relationship between Issued Capital and Subscribed Capital?

Issued Capital is a subset of Subscribed Capital
Issued Capital and Subscribed Capital are independent of each other
Issued Capital and Subscribed Capital are the same thing
Subscribed Capital is a subset of Issued Capital (correct)

Which of the following is not a right of an equity shareholder?

Right to Control
Right to Redeem (correct)
Right to Income
Pre-Emptive Right

What is the formula to calculate the Book Value of an equity share?

Paid Up Equity Capital + Reserves and Surplus / Number of Shares (D) Signup and view all the answers

Which of the following is not an advantage of equity capital?

Firm has obligation to redeem (A) Signup and view all the answers

What is the difference between Par Value and Issue Price of an equity share?

Par Value is the value stated in the memorandum, while Issue Price is the price at which the share is issued (B) Signup and view all the answers

Which of the following is NOT a disadvantage of equity capital for a company?

Equity dividends are tax-deductible (D) Signup and view all the answers

How does preference capital resemble equity capital?

Preference dividends are paid out of distributable profit (A) Signup and view all the answers

What is the key difference between cumulative and non-cumulative preference shares?

Cumulative preference shareholders receive dividends for the previous year(s) in which dividend was not paid (B) Signup and view all the answers

What is the key difference between participating and non-participating preference shares?

Participating preference shareholders get a share in the company's profits after a certain rate of dividend is paid to equity shareholders (A) Signup and view all the answers

Which of the following is true about redeemable preference shares?

They are repayable at par or at a premium after a specified period (B) Signup and view all the answers

Which of the following statements about preference capital is NOT true?

It is an obligatory payment (C) Signup and view all the answers

What is the primary purpose of budgeting in project management?

To establish a cost baseline to measure project performance (D) Signup and view all the answers

Which of the following is NOT a typical input to the 'Determine Budget' process?

Scope Management Plan (B) Signup and view all the answers

What is the purpose of including contingency in a project budget?

To cover unplanned but required changes (A) Signup and view all the answers

How does the Work Breakdown Structure (WBS) contribute to the Determine Budget process?

Both a and b (A) Signup and view all the answers

Which of the following is NOT a key input to the 'Determine Budget' process?

Risk Management Plan (C) Signup and view all the answers

What is the primary output of the 'Determine Budget' process?

A cost baseline to measure project performance (C) Signup and view all the answers

Which of the following statements about loans is correct?

Repayment of loans is made in installments, while interest is typically paid monthly in Ethiopia. (A) Signup and view all the answers

What distinguishes debentures from loans?

Debentures are funded by public or a group of people, while loans are provided by banks or institutions. (A) Signup and view all the answers

What is a secured debenture?

A debenture that is tied to the financing of a specific asset or project, giving the debenture holder a legal interest in that asset or project. (D) Signup and view all the answers

Which of the following is NOT mentioned as a source of loans in the given text?

Venture capital firms (B) Signup and view all the answers

What is the primary difference between a loan and a debenture in terms of repayment?

The text does not provide information about the repayment differences between loans and debentures. (D) Signup and view all the answers

What is a floating charge in the context of debentures?

The text does not provide information about floating charges in the context of debentures. (C) Signup and view all the answers

What is the purpose of comparing the cost baseline with actual results?

To determine if corrective or preventive action is necessary (B) Signup and view all the answers

What is the Earned Value (EV) in Earned Value Management (EVM)?

The estimated value of work completed (C) Signup and view all the answers

What is the purpose of the Schedule Variance in Earned Value Management (EVM)?

To determine if the project is ahead or behind schedule (B) Signup and view all the answers

What is the Estimate to Complete (ETC) in Earned Value Management (EVM)?

The forecasted costs to complete the remaining work (D) Signup and view all the answers

What is the purpose of the Cost Variance in Earned Value Management (EVM)?

To measure the difference between planned and actual costs (D) Signup and view all the answers

What is the purpose of the Estimate at Completion (EAC) in Earned Value Management (EVM)?

To calculate the total expected cost of the project (A) Signup and view all the answers