JAMB - Commerce (2006 - No. 13)
A public company has 2 000 000 ordinary shares of 50k each and offers 50% for subscription at N2 per share.
If the shares were fully subscribed, calculate the issued capital?
If the shares were fully subscribed, calculate the issued capital?
N4 000 000
N2 000 000
N1 000 000
500 000
Explanation
Total number of ordinary shares: 2,000,000.
Nominal value of each share: 50k (which is N0.50)
Subscription offer: 50% of the shares
Subscription price: N2 per share
Shares offered for subscription = 5% of 2,000,000 = 1,000,000.
Issued Capital = Shares offered × Subscription price = 1,000,000 x 2 = N2,000,000.
The issued capital when the shares are fully subscribed is N2,000,000.
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