Question

When Company issues its shares at an amount more than the nominal or par value of shares. This situation is known as ______?

Options

• Shares issued at par

• Shares issued at discount

• Shares issued at premium

• None of the above

Answer 1

When Company issues its shares at an amount more than the nominal or par value of shares. This situation is known as shares issued at premium.

Explanation:

Shares of financially robust and well-managed corporations are frequently issued at a premium, or at a price higher than the nominal or par value of the shares. When a share with a nominal value of Rs. 100 is sold for Rs. 105, it is said to have been offered at a 5% premium.