Read the following information and answer the question.
ABC Ltd offered 20,000, 12% debentures of ₹100 each at a premium of 10% payable as ₹40 on application (including premium) and balance on allotment redeemable after 8 years. 30,000 applications are received by the company and the allotment is made on pro-rata basis. All the money on application and allotment is received by the company timely.
What is the amount of allotment per debenture?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹70.
Face value of debenture = ₹100
Application money = ₹40 including premium of 10%.
Premium = 100 x 10/100
= ₹10
Application money excluding premium = 40- 10
= 30
Allotment money = 100 -30
= ₹70