Question

Assertion (A): Forfeited shares cannot be issued at a price that is higher than its nominal (face) value.

Reason (R): Forfeited shares is not an issue of shares but sale of shares.

In the context of above two statements, which of the below options is correct?

विकल्प

• Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is false but Reason (R) is true.

• Both Assertion (A) and Reason (R) are false.

Answer 1

Assertion (A) is false but Reason (R) is true.

Explanation:

Forfeited shares may be reissued at par, at a discount or at a premium. Hence, they can be reissued at a price higher than their nominal value because reissue is treated as a sale of shares.