Capital Raising Quiz

What is the term for capital obtained by selling shares?

• Loan capital

• Share capital

• Equity capital

• Debt capital

Which part of the Companies Act 2006 deals with issuing shares?

• Part 17

• Part 10

• Part 5

• Part 20

Which of the following is a type of security mentioned in the document?

• Intellectual property

• Fixed and floating charges

• Brand value

• Customer loyalty

What is a key legal consideration when dealing with loan capital?

• Market analysis

• Loan agreements

• Product pricing

• Distribution channels

What is a key feature of equity financing in terms of risk?

• Must repay with interest

• No repayment required

• Interest costs can be high

• Must meet loan terms

Which of the following is a legal basis for floating charges?

• Companies Act 2006

• Consumer Rights Act 2015

• Data Protection Act 2018

• Equality Act 2010

What is the effect of a negative pledge clause on asset dealing?

• Restricts the company from dealing with assets.

• Enables the company to deal freely with the assets.

• Allows lenders to take more charges.

• Ranks assets behind fixed charges.

What is the consequence of issuing new shares for a company?

• Increased debt

• Dilution of ownership

• Higher interest payments

• Reduced equity

Why is finance crucial for business decision-making?

• It helps in reducing taxes

• It ensures the company’s profitability and sustainability

• It limits the number of employees

• It decreases production costs

What happens when a floating charge is crystallized?

• The company gains more assets

• The lender can seize specific assets

• The charge is removed

• The company receives more funding