[amp_mcq option1=”a-2, b-1, c-4, d-3″ option2=”a-3, b-4, c-2, d-1″ option3=”a-4, b-3, c-2, d-1″ option4=”a-4, b-3, c-1, d-2″ correct=”option3″]
The correct answer is: C. a-4, b-3, c-2, d-1
- New share (Admission) = Old share – Sacrifice share
- Gaining ratio = New share / Old share
- Sacrificing ratio = Old share / New share
- New share (Retirement) = Old share + Gaining share
Here is a brief explanation of each option:
- New share (Admission): When a new share is issued, the old shareholders will receive a new share for each old share they hold. The number of new shares issued is equal to the number of old shares held multiplied by the gaining ratio.
- Gaining ratio: The gaining ratio is the ratio of the number of new shares issued to the number of old shares held. The gaining ratio is always greater than 1.
- Sacrificing ratio: The sacrificing ratio is the ratio of the number of old shares held to the number of new shares issued. The sacrificing ratio is always less than 1.
- New share (Retirement): When a share is retired, the old shareholders will receive a cash payment for each old share they hold. The amount of the cash payment is equal to the market value of the old share multiplied by the sacrificing ratio.