Recently while appraising a loan proposal I noticed that the
company was a newly formed company. While allotting the
capital among the share holders the shares were allotted at
a huge premium. What is the reason for showing a huge premium?
Answers were Sorted based on User's Feedback
Answer / ajay
Issuing the shares at premiums is a matter of great
concern. if a share is issued at premium it may reflect
various things like wise.
-Market Requirement of Product or services.
-Quality of prod. or services
-Market Capitalization of pro. & ser.
-board competency
-Brand loyality
etc.
As the rate of above goes higher, the result is high rate
of preimium and vice-e-versa.
considering the same there may a practical scenario, take a
private company for eg.-
-Authorised capital - Rs 50.00 lacs (50,000 equity of Rs.
100 each.)
-Share issued and subscribed 20,000 shares @ Rs.425
(including premium of Rs. 325.to person other than promoters
-Shares issued otherwise than for cash to the Promotrs is
29,000
Shares subscribed by promoters as asubscriber to memorandum
is 1,000 equity.
NOW UNDERSTAND THE CAPITAL AND CONTROLLING STRUCTURE OF THE
CO.-
PROMOTERS INVOLVEMENT IN CAPITAL IN CASH OR OTHERWISE-
EQUITY (in no.)- 30,000 or 60% voting power i.e control in
hand
VALUE PAID FOR THE SHARES- 30.00 LACS (1.00 LACS IN CASH
AND OTHER 29.00 LACS IN KIND)
OTHERS INVOLVEMENT IN CASH-
EQUITY- 20,000 OR 40% voting power.
VALUE PAID FOR THE SHARES-Rs. 85.00 lacs (including premium
amount of Rs. 65.00 lacs)
Let's check the Banks position-
There is Rs. 86.00 lacs in the co.(s) banks account outof
which only Rs. 1.00 lacs is promoters contribution.
This all happend due to TTHE CORPORATE, MANAGEMENT, BRAND,
PRODUCT OR SEVICE STANDARD OF THE CO. WHICH ULTIMATLY
MOTIVATES THE CORPORATES TO ISSUE THE SHARES ART PREMIUM.
Is This Answer Correct ? | 1 Yes | 0 No |
Answer / reena
The Company might be opening with a huge project and for
that purpose the Company might require huge capital . As
the Company wants to issue less capital (number of shares),
it might be issuing the shares at a premium for raising teh
funds.
Is This Answer Correct ? | 1 Yes | 2 No |
what is the difference between public company and private company
Is form 38 mandatory to issue c form in up. thru online mode
what is FBT?
please tell me about Advance Bank Gurantee & Performance Bank Gurantee
financial statement of company sales(1,00,000 units @ Rs.10/-) 10,00,000 Variable costs 5,00,000 Contribution 5,00,000 Fixed costs 3,00,000 Net profit 2,00,000 p/v ratio 50% BEP 6,00,000 Margin of safety ratio 4,00,000 If the price increases by 10% what shall be the new p/v ratio and BEP? If the price increases by 10% is accompanied by a reduction in volume by 12%,what shall be the effect on BEPand profit?
what is the path of insurance calculation?
Expand---------MDRT
STATE & EXPLAIN THE IMPACT OF GLOBAL FINANCIAL CRIS ON CEMENT SECTOR IN INDIA:
Does any one attented HSBC audit compliance test? Please let me know asap. suraj
1.WHAT IS BRS? 2.WHY DO WE PREPARE BALANCE SHEET? 3.WHAT IS TRIAL BALANCE? 4.WHAT IS VENTURE CAPITAL? 5. WHAT IS DEFFERED REVENUE EXPENDITURE? 6. what is mutualfund? 7. why net profit shown liabilities side in balance sheet?
sir i want aao lic exam model question paper
DIFFERENCE BETWEEN EQUITY SHARE CAPITAL & PREFERENCIAL SHAR CAPITAL