Accounting Multiple Choice Question – 4 February 2021

Why might a company repay part of its share capital? 

Select ONE answer:

1. Its cash reserves exceed its requirements for the foreseeable future.
2. Its shareholders need the cash.
3. Its shares are valued below their nominal value on the open market.
4. It wishes to decrease its gearing.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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