Corporate Actions (Dividends, Bonus, Split, Buyback) MCQs September 11, 2025 by u930973931_answers 50 Score: 0 Attempted: 0/50 Subscribe 1. Dividend declared by a company is a part of: (A) Assets (B) Profits distributed to shareholders (C) Loans (D) Reserves kept aside 2. Which of the following is NOT a corporate action? (A) Dividend (B) Bonus shares (C) Stock split (D) Income tax payment 3. Bonus shares are issued to: (A) Creditors (B) Government (C) Existing shareholders free of cost (D) Employees only 4. A stock split increases: (A) Number of shares outstanding (B) Face value of shares (C) Total company capital (D) Dividend amount only 5. Buyback of shares means: (A) Issue of new shares (B) Company repurchases its own shares (C) Merger with another company (D) Listing of securities 6. Interim dividend is declared: (A) At the end of the year (B) Before the final accounts are prepared (C) Only after bonus issue (D) After buyback 7. Which type of dividend is given in the form of extra shares? (A) Cash dividend (B) Stock dividend (C) Interim dividend (D) Final dividend 8. Record date in corporate actions refers to: (A) Date of share allotment (B) Date to determine eligible shareholders (C) Date of board meeting (D) Date of issue closure 9. Ex-dividend date means: (A) Last date to receive dividend (B) First date when new buyers are not eligible for dividend (C) Date of bonus issue (D) Date of share buyback 10. Which corporate action reduces the face value of shares? (A) Bonus issue (B) Buyback (C) Stock split (D) Dividend declaration 11. A company announces a 2:1 bonus issue. This means: (A) For every 2 shares, 1 bonus share is given (B) For every 1 share, 2 bonus shares are given (C) Share price doubles (D) Shares are bought back 12. Which of the following is a reason for share buyback? (A) To increase EPS (B) To utilize surplus cash (C) To support share price (D) All of the above 13. Which type of dividend is NOT common? (A) Cash dividend (B) Property dividend (C) Stock dividend (D) Loan dividend 14. Corporate actions are decided by: (A) Creditors (B) Shareholders in AGM/Board of Directors (C) Customers (D) Employees 15. Which corporate action does not change shareholder’s wealth? (A) Bonus issue (B) Stock split (C) Rights issue (D) Cash dividend 16. Which of these corporate actions improves liquidity of shares? (A) Bonus issue (B) Stock split (C) Buyback (D) Both A and B 17. Buyback of shares leads to: (A) Increase in number of shares (B) Decrease in number of shares outstanding (C) Increase in face value (D) Increase in reserves 18. Which of the following corporate actions is compulsory for companies? (A) Dividend (B) Bonus issue (C) Rights issue (D) None of the above 19. Final dividend is recommended by: (A) Board of Directors (B) Shareholders in AGM (C) Creditors (D) Registrar of Companies 20. A company declares a stock split of 1:5. This means: (A) Each share is divided into 5 shares (B) 5 shares are merged into 1 share (C) Share price increases 5 times (D) Dividend becomes 5 times 21. Dividend payout ratio is: (A) Dividend per share / Earnings per share (B) Earnings per share / Dividend per share (C) Dividend / Face value of share (D) Dividend / Market price of share 22. Which corporate action increases a shareholder’s proportionate holding? (A) Bonus issue (B) Rights issue if subscribed (C) Buyback (D) Dividend 23. Which of the following is a cash outflow for company? (A) Dividend (B) Buyback (C) Rights issue (D) Both A and B 24. Which corporate action signals strong financial position of a company? (A) Bonus issue (B) Dividend declaration (C) Buyback of shares (D) All of the above 25. When company declares 100% dividend, it means: (A) Dividend equals face value of share (B) Dividend equals market value of share (C) Dividend is double the profit (D) Dividend is half the reserves 26. Corporate actions are generally classified as: (A) Mandatory (B) Voluntary (C) Both A and B (D) None of the above 27. Which type of corporate action is initiated by shareholders? (A) Dividend (B) Bonus (C) Rights issue subscription (D) Stock split 28. Which type of dividend is paid in addition to interim and final? (A) Extra dividend (B) Stock dividend (C) Property dividend (D) Cash dividend 29. Which corporate action often leads to an increase in market capitalization? (A) Bonus issue (B) Stock split (C) Rights issue (D) Cash dividend 30. Which corporate action leads to capital restructuring? (A) Dividend (B) Stock split (C) Buyback (D) Bonus 31. Ex-bonus date refers to: (A) Last date to receive dividend (B) Last date when shares are eligible for bonus (C) First date when buyers don’t get bonus shares (D) Bonus announcement date 32. Rights issue is offered to: (A) General public (B) Only promoters (C) Existing shareholders (D) Employees only 33. Which corporate action reduces earnings per share (EPS)? (A) Bonus issue (B) Stock split (C) Both A and B (D) Buyback 34. A share buyback often increases: (A) EPS (B) Market price (C) Promoter holding percentage (D) All of the above 35. Interim dividend is approved by: (A) Board of Directors (B) AGM (C) SEBI (D) Stock Exchange 36. Which corporate action does not involve cash flow? (A) Bonus shares (B) Dividend (C) Buyback (D) Rights issue 37. Which of these corporate actions decreases liquidity of shares? (A) Bonus issue (B) Stock split (C) Buyback (D) Interim dividend 38. Cash dividend is paid out of: (A) Reserves and surplus (B) Share premium account (C) General public contributions (D) Fixed deposits 39. Companies announce dividends as a signal of: (A) Weakness in cash flow (B) Strong financial health (C) Increasing liabilities (D) Declining market value 40. Rights issue is generally priced: (A) At a discount to market price (B) Equal to market price (C) Higher than market price (D) Twice the market price 41. Corporate actions are essential for: (A) Enhancing shareholder value (B) Ensuring compliance (C) Restructuring capital (D) All of the above 42. Which type of buyback is common? (A) Open market purchase (B) Tender offer (C) Both A and B (D) None 43. Stock splits are undertaken to: (A) Reduce share price for better affordability (B) Increase company profits (C) Increase dividend payout (D) Avoid bonus issue 44. Which type of dividend is issued when cash reserves are low? (A) Stock dividend (B) Cash dividend (C) Interim dividend (D) Special dividend 45. Buyback reduces: (A) Equity share capital (B) Company’s debt (C) Dividend declared (D) Face value 46. Stock split results in: (A) Reduced face value (B) Increased number of shares (C) Same market capitalization (D) All of the above 47. Dividend is generally paid to shareholders in: (A) Cash (B) Bank transfer/electronic credit (C) Cheque or warrant (D) All of the above 48. Which of the following corporate actions benefits long-term investors most? (A) Bonus shares (B) Stock split (C) Dividend reinvestment (D) All of the above 49. Corporate actions like dividend and bonus are classified as: (A) Mandatory corporate actions (B) Voluntary corporate actions (C) Mixed actions (D) Optional only 50. A company declaring bonus issue of 1:1 means: (A) One bonus share for every share held (B) One bonus share for every 2 shares held (C) Two bonus shares for every 1 share held (D) One share is split into two shares