What is the primary difference between shares issued at par and shares issued at a premium?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Shares issued at a premium have an excess amount over the nominal value.
When shares are issued at a premium, it means that the issue price of the shares is higher than their nominal value (face value). The premium is the additional amount that investors pay per share above the nominal value. This premium represents the perceived value of the company's shares by investors, which can be influenced by factors such as the company's financial performance, growth prospects, and market demand.