This question requires candidates to explain two related but distinct aspects of share capital. Part (a) relates to the concepts of share capital while part (b) focuses on the distinct types of shares.

8–10 marks 
Thorough explanation of the meaning and effect of both elements of the question.

5–7 marks 
Reasonable explanation of both aspects but perhaps lacking in detail in relation to some of the individual parts.

2–4 marks 
Some, but limited, knowledge of both elements or only dealing with one of them.

0–1 mark 
Little, if any, understanding of any of the concepts.