A company may issue fresh shares :
(A) At discount
(B) As Collateral Security
(C) At Par
(D) For Consideration other than cash
(E) At Premium
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) - (C), (D) and (E) Only.
A company can issue shares for cash at par and premium and consideration other than cash.
* At par- Share are issued for cash at par value means if share is of ₹10 then it is issued at ₹10.
* At premium - Shares are issued at premium. Companies with good reputation can issue shares at premium i.e. more value than face value. For e.g. if a share is of ₹10 is issued for ₹12 then it is known as shares issued at premium.
* Consideration other than cash- Share can be issued for consideration other than cash. If any company purchased fixed asset then it can issue shares for the payment of the asset to vendor.
* Shares can not be issued at discount.
*Debentures are issued as collateral security not shares.