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Issued Share Capital

Premium recei...

Question

Premium received on new issue of shares cannot be used for redemption of par value of preference shares.

A

True

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B

False

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Solution

The correct option is A True
The amount of premium received in case of issue of shares cannot be utilised for redemption of preference shares to the extent of face value of shares, rather it can be utilised for the purpose of premium, if any in case of redemption.

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