Equity Shares and Capital

This is a duplicate of question 88235 asking about TCS dividend per share. The correct answer is Rs 2 per share. Options of Rs 8000 and Rs 9000 are unrealistically high for a dividend per share - these would represent extraordinary one-time payouts, not regular dividends. Rs 0 would mean no dividend was declared. A dividend of Rs 2-3 per share is standard for large IT companies like TCS during dividend declarations.

Nokia announced in 2008 that it would acquire 52% of Symbian Software Ltd. This was part of Nokia's strategy to fully control the Symbian operating system, which was the leading smartphone OS at the time. The other options (45%, 48%, 51%) are not the correct percentage announced.

SEBI's guidelines mandated that companies must list their shares within 12 days of IPO closure. This rule was implemented to ensure timely trading commencement and reduce the period between fund allocation and actual share trading, protecting investor interests.

To compare investments, calculate the actual return percentage based on market price. First: (4.5/120) x 100 = 3.75% return. Second: (6.5/132) x 100 = 4.92% return. The second investment gives a higher actual return percentage (4.92% vs 3.75%), making it the better investment.

LADPC is structured as a public company with share distribution where Local Authorities own 60% and the Government of Israel owns 40% of the founding shares. This ownership structure ensures municipal control while maintaining government oversight. The other options incorrectly distribute these ownership percentages.

Tata Group did hold shares in Idea Cellular earlier through Tata Teleservices (Maharashtra) Limited. There was cross-ownership and partnerships in the early days of telecom liberalization in India.

To answer this question, let's go through each option to understand why it is correct or incorrect:

Option A) Debt/Total capital ratio will improve. This option is incorrect because when the company issues preferred shares, it increases its total capital. As a result, the debt/total capital ratio will actually deteriorate, not improve.

Option B) Interest coverage ratio will deteriorate. This option is correct. The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. When the company issues preferred shares with a fixed dividend, it adds an additional fixed expense to its financial obligations. This can reduce the company's ability to cover its interest expenses and therefore lead to a deterioration in the interest coverage ratio.

Option C) Preferred shareholders will rank below debt holders should the company file for bankruptcy. This option is correct. In the event of bankruptcy, debt holders have a higher priority in receiving their claims compared to preferred shareholders. Debt holders have a legal claim on the assets of the company and are typically paid first before any distributions are made to preferred shareholders.

Option D) None of the above. This option is incorrect because option A is least likely to be correct, as explained above.

The correct answer is A) Debt/Total capital ratio will improve. This option is least likely to be correct because issuing preferred shares increases total capital and therefore deteriorates the debt/total capital ratio.

Therefore, the correct answer is A) Debt/Total capital ratio will improve.

'Stake' in a business context means a share, interest, or investment in an enterprise. 'A share or interest in a business' is the correct definition. 'A passing interest' is too weak, 'a cut of meat' refers to a literal stake as food, and 'a decision to leave' describes quitting, not having a stake.

Walter's dividend model states that when a firm's return on investment (r) equals its cost of capital (k), shareholders are indifferent between receiving dividends now or having the firm reinvest earnings. In this equilibrium condition, paying 100% dividends maximizes shareholder wealth.

 Right shares carry preferential rights for existing shareholders to buy additional shares in the company.

According to Section 55, no company, limited by shares, shall issue irredeemable preference shares or preference shares redeemable after the expiry of 20 years from the date of issue. However, a Company may issue preference shares redeemable after 20 years for such infrastructure projects as may be specified, under the Companies Act, 2013.

As per Section 65 of the Companies Act, 2013, a Company may decide by passing a resolution that a certain portion of its subscribed uncalled capital shall not be called up except in the event of winding up of the company which is called Reserve Capital. Reserve Capital is different from Capital reserve. Reserve capital which is portion of the uncalled capital to be called up in the event of winding up of the company is entirely different in nature from capital reserve which is created out of capital profits only.

According to Companies Act,2013 there is no restriction on companies to demand complete issue price of shares only on applcation or allotment or call of shares. Issue price can either be demanded in lumpsum or installments on application &/or allotment &/or call.

Authorised Share Capital, i.e maximum amount a company can raise in its lifetime is to be mentioned in the Capital Clause of the Memorandum of Association.