Commercial Applications
Statement I : The capital share of a company is generally divided into a large number of shares of small value.
Statement II : These shares can only be bought by noble people of the society.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Joint Stock Company
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Answer
Only I is correct
Reason — Statement I is correct because the share capital of a company is generally divided into a large number of shares of small value, which is known as the feature of corporate finance. Statement II is wrong because these shares are not restricted to noble people; they are purchased by a large number of people from different walks of life. The small value of shares makes them affordable to ordinary investors as well.
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