Question

N Ltd. had 9,000, 8% preference shares of Rs. 100 each, fully paid up. The company decided to redeem these preference shares at par by the issue of sufficient number of equity shares. How many equity shares are required to be issued if new equity shares are to be issued at Rs. 10 each?

• A. 90,000
• B. 1,00,000
• C. 75,000
• D. 93,333

Answer 1

Answer: (A)

90,000

Here, number of shares is 9000 at Rs 100 each which makes the amount on shares to be Rs 9,00,000. In order to issue new shares at Rs 10 each, the number of shares required is Rs 9,00,000/Rs 10 i.e. Rs 90,000.