Question

Z Ltd. proposed to issue 1,00,000 equity shares of 100 each at a premium of 20%. The minimum amount of application money to be collected per share as per the SEBI Guideline will be _____.

• A. Rs. 25
• B. Rs. 30
• C. Rs. 120
• D. Rs. 50

Answer 1

The correct option is B Rs. 30

As per SEBI guidelines, the amount of application money collected per share should not be less than 25% of the issue price of the share. Here, the shares are issued at Rs 100 each with 20% as premium i.e. issue price is Rs 120 per share. Hence, the minimum amount of application money to be collected per share as per the SEBI Guideline will be 25% of Rs 120 i.e. Rs 30.