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A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April, 2020. The debentures were due for redemption on 1st March, 2024. The terms of issue of debentures provided that they were redeemable at a premium of 5%. The company offered an option to the debenture holders to convert redeemable value of 20% of their holding into equity shares (nominal value ₹10) at a predetermined price of 15 per share and the payment in cash for remaining debentures. 50 debentures holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.?
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A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April...
Debenture Details
- Total Debentures Issued: 40,000
- Face Value of Each Debenture: ₹100
- Total Amount of Debentures: 40,000 x ₹100 = ₹40,00,000
- Interest Rate: 12%
- Redemption Date: 1st March 2024
- Redemption Premium: 5%
Conversion Option Offered
- Debenture Holders Option: Convert 20% of their holding into equity shares.
- Nominal Value of Equity Shares: ₹10
- Predetermined Price for Conversion: ₹15 per share
Debenture Holders Exercising the Option
- Total Debentures Held by Non-Exercising Holders: 5,000
- Total Debentures Remaining for Conversion: 40,000 - 5,000 = 35,000
Calculation of Equity Shares Allotted
- 20% of Total Debentures for Conversion: 20% of 35,000 = 7,000 Debentures
- Total Amount for Conversion: 7,000 x ₹100 = ₹7,00,000
- Number of Equity Shares Allotted: ₹7,00,000 ÷ ₹15 = 46,667 Shares (rounded down)
Cash Payment on Redemption
- Total Redemption Value (including premium):
- Face Value: ₹100 per debenture
- Total Redemption Value: ₹100 + (5% of ₹100) = ₹105
- Total Cash Payment for Non-Converted Debentures:
- Non-Converted Debentures: 5,000 x ₹105 = ₹5,25,000
- Total Cash Payment for Remaining Debentures:
- Remaining Debentures: 28,000 x ₹105 = ₹29,40,000
- Total Cash Payment: ₹5,25,000 + ₹29,40,000 = ₹34,65,000
Summary
- Total Equity Shares Allotted: 46,667 Shares
- Total Cash Payment on Redemption: ₹34,65,000
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A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April, 2020. The debentures were due for redemption on 1st March, 2024. The terms of issue of debentures provided that they were redeemable at a premium of 5%. The company offered an option to the debenture holders to convert redeemable value of 20% of their holding into equity shares (nominal value ₹10) at a predetermined price of 15 per share and the payment in cash for remaining debentures. 50 debentures holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.?
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A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April, 2020. The debentures were due for redemption on 1st March, 2024. The terms of issue of debentures provided that they were redeemable at a premium of 5%. The company offered an option to the debenture holders to convert redeemable value of 20% of their holding into equity shares (nominal value ₹10) at a predetermined price of 15 per share and the payment in cash for remaining debentures. 50 debentures holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.? 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 A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April, 2020. The debentures were due for redemption on 1st March, 2024. The terms of issue of debentures provided that they were redeemable at a premium of 5%. The company offered an option to the debenture holders to convert redeemable value of 20% of their holding into equity shares (nominal value ₹10) at a predetermined price of 15 per share and the payment in cash for remaining debentures. 50 debentures holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company had issued 40,000, 12% debentures of ₹ 100 each on 1st April, 2020. The debentures were due for redemption on 1st March, 2024. The terms of issue of debentures provided that they were redeemable at a premium of 5%. The company offered an option to the debenture holders to convert redeemable value of 20% of their holding into equity shares (nominal value ₹10) at a predetermined price of 15 per share and the payment in cash for remaining debentures. 50 debentures holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.?.
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