Accounting Multiple Choice Question – 22 August 2022

A company has an authorised share capital of one million shares of £1.00 each and an issued capital of 800 000 shares of £1.00 each.

It pays a 10 % dividend.

The current dividend yield is 5%.

What is the market price of one share?

Select ONE answer:

1. £1.00
2. £1.60
3. £2.00
4. £2.50

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 3

1. Not correct
2. Not correct
3. Correct ==> 5% = 10p / share price ==> 0.1 / 0.05 = £2
4. Not correct

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