A company has 1,000,000 issued ordinary shares with a nominal value of €1 each, issued at €1.75. If the current share price is €3.75, what is the company's current market capitalisation?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

Prepare for the QFA Investments Exam 1. Study with flashcards and multiple-choice questions with detailed explanations. Enhance your understanding and succeed on your exam!

Multiple Choice

A company has 1,000,000 issued ordinary shares with a nominal value of €1 each, issued at €1.75. If the current share price is €3.75, what is the company's current market capitalisation?

Explanation:
Market capitalisation is the total value of a company’s equity in the market, calculated by multiplying the current share price by the number of shares outstanding. Here, there are 1,000,000 shares outstanding and the current price is €3.75, so the market cap is 1,000,000 × €3.75 = €3,750,000. The nominal value or the price at which shares were issued doesn’t affect market cap, and there’s no information suggesting any treasury shares. Thus, the market capitalisation is €3,750,000.

Market capitalisation is the total value of a company’s equity in the market, calculated by multiplying the current share price by the number of shares outstanding. Here, there are 1,000,000 shares outstanding and the current price is €3.75, so the market cap is 1,000,000 × €3.75 = €3,750,000. The nominal value or the price at which shares were issued doesn’t affect market cap, and there’s no information suggesting any treasury shares. Thus, the market capitalisation is €3,750,000.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy