A-LevelAccountingFinancial Accounting (Company Accounts)May/June 2013Paper 1 Q191 Mark
A company has ordinary shares of $1 each. Each year it pays a dividend of 10% of the nominal value of the shares. It now wishes to raise a further $120000 by an issue of shares. This would bring in additional profit of $10000 and dividends paid would increase by $2500 a year. At which price should the company issue the new shares to maintain the percentage of dividend?
A$1.00
B$1.20
C$1.60
D$4.80
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of financial accounting (company accounts) within the Accountingsyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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