Question

Under subscription and over subscription antar

Answer 1

Answer:Over Subscription:

1. Applications received are more than the shares issued

2. In this case the application money is refunded on the rejected applications

3. Pro-rata allotment is made in this case

4. Minimum subscription is automatically received

5. Over subscription conveys that the position of company in capital market is very good

6. Issued Capital and subscribed capital are equal.

Under Subscription:

1. Applications received are less than the shares issued

Explanation:

2. Generally, the refund situation does not arise

3. No pro-rata allotment

4. Under subscription may not satisfy the requirement of minimum subscription

5. It sends a message that the company does not enjoy full confidence of investors in capital market

6. Subscribed capital is less than the Issued capital.