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What is the purpose of issuing securities at a premium by a company?
  • a)
    To attract more investors by offering discounted shares.
  • b)
    To raise capital by selling shares at a price above par value.
  • c)
    To reduce the company's debt by converting it into equity.
  • d)
    To distribute profits among shareholders as dividends.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is the purpose of issuing securities at a premium by a company?a)...
Issuing securities at a premium means selling them at a price above their nominal or par value. This allows the company to raise more capital for its operations and expansion by offering shares at a higher price to investors. The amount collected as premium is transferred to the "securities premium account" as per Section 52 of the Companies Act, 2013.
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What is the purpose of issuing securities at a premium by a company?a)To attract more investors by offering discounted shares.b)To raise capital by selling shares at a price above par value.c)To reduce the company's debt by converting it into equity.d)To distribute profits among shareholders as dividends.Correct answer is option 'B'. Can you explain this answer?
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