Question

Select the most appropriate answer from the alternatives given below and rewrite the sentence :

If shares are issued at its face value, it is called as issue at __________________.
a) premium
b) discount
c) par
d) none of these

Answer 1

If shares are issued at its face value, it is called as issue at par.

Explanation: Shares are said to have been issued at par when the face value of a share equals its issue price. On the other hand, if shares are issued at a price below their face value, it is known as issue at discount, whereas if shares are issued at a price that is more than the face value, it is known as issue at premium. For example, if a share is issued at a face value of Rs 10, it is issued at par. If it is issued at Rs 9, then it is issued at a discount of Re 1 and if it is issued at Rs 12, then it is issued at a premium of Rs 2.