Question

Alfa Ltd. invited applications for 50,000 equity shares of \rupee10 each at a premium of 30\%. The whole amount was payable on application. Applications were received for 2,50,000 shares. The company decided to allot the shares on a pro-rata basis to all the applicants. The amount refunded by the company was:

• A. \rupee32,50,000
• B. \rupee15,60,000
• C. \rupee39,00,000
• D. \rupee26,00,000

Hint:

In pro-rata allotments, the excess money received for shares not allotted is refunded to the applicants at the full application price.

Answer 1

The Correct Option is A

Total number of shares applied for = 2,50,000. Total shares allotted = 50,000. Excess applications = 2,50,000 - 50,000 = 2,00,000. Amount received per share = \rupee10 (face value) + \rupee3 (premium) = \rupee13. Amount refunded = Excess shares × Amount per share = 2,00,000 × \rupee13 = \rupee32,50,000.