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T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?
- a)Rs.5.00
- b)Rs.6.00
- c)Rs.7.00
- d)Rs.8.40
Correct answer is option 'A'. Can you explain this answer?
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T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premi...
Minimum Application Money for Equity Shares
The minimum amount of application money to be collected per share can be calculated as follows:
- Face value of one share = Rs.100
- Premium on one share = 40% of face value = Rs.40
- Total cost of one share = Face value + Premium = Rs.100 + Rs.40 = Rs.140
- Minimum application money = 5% of total cost = 5% of Rs.140 = Rs.7
- However, as per SEBI guidelines, the minimum application money cannot exceed Rs.5 per share.
Therefore, the correct answer is option 'A' - Rs.5.00.
Explanation
When a company issues shares to the public, it has to ensure that the minimum application money collected from the investors is not too high. This is because if the minimum application money is too high, it may discourage small investors from applying for the shares. Hence, SEBI has prescribed guidelines on the minimum application money that can be collected.
In this case, T Ltd. is proposing to issue equity shares of Rs.100 each at a premium of 40%. This means that the company will sell each share for Rs.140. As per SEBI guidelines, the minimum application money that can be collected is 5% of the total cost of one share. Hence, the minimum application money for one share is Rs.7.
However, SEBI has also prescribed that the minimum application money cannot exceed Rs.5 per share. Hence, the minimum application money for one share is capped at Rs.5.
The minimum amount of application money to be collected per share can be calculated as follows:
- Face value of one share = Rs.100
- Premium on one share = 40% of face value = Rs.40
- Total cost of one share = Face value + Premium = Rs.100 + Rs.40 = Rs.140
- Minimum application money = 5% of total cost = 5% of Rs.140 = Rs.7
- However, as per SEBI guidelines, the minimum application money cannot exceed Rs.5 per share.
Therefore, the correct answer is option 'A' - Rs.5.00.
Explanation
When a company issues shares to the public, it has to ensure that the minimum application money collected from the investors is not too high. This is because if the minimum application money is too high, it may discourage small investors from applying for the shares. Hence, SEBI has prescribed guidelines on the minimum application money that can be collected.
In this case, T Ltd. is proposing to issue equity shares of Rs.100 each at a premium of 40%. This means that the company will sell each share for Rs.140. As per SEBI guidelines, the minimum application money that can be collected is 5% of the total cost of one share. Hence, the minimum application money for one share is Rs.7.
However, SEBI has also prescribed that the minimum application money cannot exceed Rs.5 per share. Hence, the minimum application money for one share is capped at Rs.5.
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Community Answer
T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premi...
Since the application money should not be less than 5% of the nominal value of shares, so the answer will be 100 x 5% = Rs.5
So A is the correct option.
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T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer?
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T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer?.
T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer?.
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T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer?, a detailed solution for T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of T Ltd. proposed to issue 6,000 equity shares of Rs.100 each at a premium of 40%. The minimum amount of application money to be collected per share = ?a)Rs.5.00b)Rs.6.00c)Rs.7.00d)Rs.8.40Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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