Multiple choice

Directions: Choose the correct option for the given question:

X Ltd. purchased a car from Maruti Udyog Ltd. for Rs. 5,00,000. As per agreement Rs. 80,000 was to be paid in cash and the balance by issue of shares of Rs. 10 each at a premium of Rs. 5 per share. How many shares should X Ltd. issue to Maruti Udyog Ltd. for the car ?

  1. 30,000

  2. 29,000

  3. 28,500

  4. 28,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total purchase price = Rs. 5,00,000. Cash payment = Rs. 80,000. Balance to be paid by shares = Rs. 5,00,000 - Rs. 80,000 = Rs. 4,20,000. Each share has face value Rs. 10 and premium Rs. 5, so issue price per share = Rs. 10 + Rs. 5 = Rs. 15. Number of shares = Rs. 4,20,000 / Rs. 15 = 28,000 shares.

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