When a company issued shares at more than their face value then the excess amount is called:
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Premium.
When a company issued shares at more than their face value then the excess amount is called premium.
Shares of a company are issued either at par or at a premium. Shares are to be issued at par when their issue price is exactly equal to their nominal value according to the terms and conditions of issue. When the shares of a company are issued more than its nominal value (face value), the excess amount is called premium.