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XYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity shares to a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.
Q. In order to raise money by issuing the shares in the market the company must get applications for at least _______.
  • a)
    1,00,000 shares
  • b)
    80,000 shares
  • c)
    72,000 shares
  • d)
    20,000 shares
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh...
Issuing Equity Shares - Minimum Application

Background:
PassageXYZ Ltd is a registered company in the manufacturing of pickles and spices. Due to increased demand for packed food, the company decided to diversify its operations. For this purpose, they decided to issue 1 lakh equity shares of Rs. 10 each.

Equity Share Capital:
The authorized capital of the company is Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each.

Equity Shares Issued:
- The company issued 20,000 equity shares to a vendor to supply the machinery required for manufacturing the packed food.
- Rest of the equity shares were issued to the general public for subscription.
- The applications were received for 46,000 equity shares.

Undersubscription:
Due to undersubscription of equity shares, the remaining shares were not issued to the public.

Minimum Application:
In order to raise money by issuing the shares in the market, the company must get applications for at least 72,000 equity shares. This is because:
- The company issued 1 lakh equity shares in total.
- Out of which, 20,000 equity shares were already issued to a vendor.
- Therefore, the remaining equity shares available for public subscription are 80,000.
- The applications were received for 46,000 equity shares, which is less than the available shares.
- Hence, the shares were not issued to the public due to undersubscription.
- Therefore, in order to raise money by issuing the shares in the market, the company must get applications for at least 72,000 equity shares (80,000 minus undersubscribed shares of 8,000).
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Community Answer
PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh...
The company should get minimum subscription which is 90% of (100000 – 20000) 80000 which is 72000 shares
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PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.In order to raise money by issuing the shares in the market the company must get applications for at least _______. a)1,00,000 sharesb)80,000 sharesc)72,000 sharesd)20,000 sharesCorrect answer is option 'C'. Can you explain this answer?
Question Description
PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.In order to raise money by issuing the shares in the market the company must get applications for at least _______. a)1,00,000 sharesb)80,000 sharesc)72,000 sharesd)20,000 sharesCorrect answer is option 'C'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.In order to raise money by issuing the shares in the market the company must get applications for at least _______. a)1,00,000 sharesb)80,000 sharesc)72,000 sharesd)20,000 sharesCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.In order to raise money by issuing the shares in the market the company must get applications for at least _______. a)1,00,000 sharesb)80,000 sharesc)72,000 sharesd)20,000 sharesCorrect answer is option 'C'. Can you explain this answer?.
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