Question

if a company issues equity share of rs 1,00,000 at a premium of 10% how much money cam be used to redeem the preference share..?

Answer 1

Explanation:

Under sec 80 o the companies Act the word "proceeds" does not include the amount of the premium if the shares are issued at a premium but stands for the actual amount received if shares are issued at a discount or at par.

So, the amount of fresh proceeds = 1,00,000*10 = 10,00,000

1,00,000/10 = 10,000 = 10,000 *9 = 90,000

Total = 10,90,000.