Question

A company wants to redeem its 2,000 preference shares of Rs. 100 each at par. Company has a balance in General Reserve Rs. 50,000 and Profit and Loss account Rs. 40,000. Company wants to issue equity shares of Rs. 10 at a premium of 10%. How many equity shares should be issued for the purpose?

• A. 10,000
• B. 9,000
• C. 11,000
• D. 12,000

Answer 1

The correct option is C 11,000

Here,

50000 - 40000 =10000

and, 100 x 10 = 1000

so, 10000 + 1000 = 11000.