Question

Q.3 Study the following case / situation and express your opinion.
(1) The Balance sheet of a Donald Company for the year 2018-19 reveals equity share capital
of Rs. 25,00,000 and retained earnings of Rs. 50,00,000.
a) Is the company financially sound ?
b) Can the retained earnings be converted into capital?
c) What type of source retained earning is?
(2) Mr. Satish is a speculator. He desires to take advantage of growing market for company
product and earn handsomely.
a) According to you which type of share Mr. Satish will choose to invest ?
b) What does he receive as return on investment?
c) State any one right which he will enjoy as a shareholder.
Rohit an individual investor, invests his own funds in the securities. He depends
definite​

Answer 1

1.

a) Yes, the company is financially sound.

b) Yes, the shares is actually a capital.

c) Capital source

2.

a) Equity shares

b) Capital

c) Shareholders possess the right to share in the company's profitability and gains from its stock price appreciation.

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