Question:
When a company issues shares at a premium, the company can collect securities premium along with the following:
When a company issues shares at a premium, the company can collect securities premium along with the following:
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Securities Premium:
\[
=
\text{Issue Price} - \text{Face Value}
\]
It may be collected with application, allotment or calls.
Updated On: May 21, 2026
- Application money.
- Allotment money.
- Call money.
- Any of the above.
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The Correct Option is D
Solution and Explanation
When shares are issued at a premium:
\[
\text{Issue Price}>\text{Face Value}
\]
The excess amount received over the face value is called:
\[
\text{Securities Premium}
\]
A company may collect securities premium along with:
• Application money
• Allotment money
• Call money depending upon the terms of issue decided by the company. Thus securities premium is not restricted to any one stage of share collection. Option analysis:
• Option (A): Possible
• Option (B): Possible
• Option (C): Possible
• Option (D): Correct Therefore: \[ \boxed{\text{(D)}} \]
• Application money
• Allotment money
• Call money depending upon the terms of issue decided by the company. Thus securities premium is not restricted to any one stage of share collection. Option analysis:
• Option (A): Possible
• Option (B): Possible
• Option (C): Possible
• Option (D): Correct Therefore: \[ \boxed{\text{(D)}} \]
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