Multiple choice

Huge Ltd. issued 25,000 equity shares of Rs. 100 each at a premium of Rs. 15 each payable as Rs. 25 on application, Rs.40 on allotment and balance in the first call. The applications were received for 75,000 equity shares but the company issued to them only 25,000 shares. Excess money was refunded to them after adjustment for further calls. Last call on 500 shares were not received and were forfeited after due notice. The above is the case of

  1. over subscription

  2. pro-rata allotment

  3. forfeiture of shares

  4. all of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This question combines three distinct corporate actions: (1) Over-subscription occurred because 75,000 applications were received for only 25,000 shares, (2) Pro-rata allotment happened when the company issued only 25,000 shares to the applicants, and (3) Forfeiture of shares occurred when 500 shares were forfeited for non-payment of the last call. All three events took place in this single scenario.

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