A company invited applications for 50,000 equity shares of ₹10 each. Because of favorable market conditions, the issue was over-subscribed and applications for 80,000 shares were received and Pro-rata was made on all shares by the company. How many shares were given to a shareholder who applied for 2,600 shares?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 1,625.
Issued= 50,000 shares
Applications =80,000 shares
Pro-rata made which means 80,000/50,000 = 8:5 who applies for 8 shares got 5 shares.
Shareholder who apply for 2,600 shares got = 5/8 X 2,600
= 1625 shares