Question

ABC Ltd. offered 60,000 shares of ₹10 each to the public. The public applied for 1,00,000 shares. The company made pro-rata allotment in the ratio of 3:2 and the remaining applications were rejected and money refunded to the applicants. On how many shares did the company refund the application money?

Options

• ₹40,000 shares

• ₹10,000 shares

• ₹30,000 shares

• ₹20,000 shares

Answer 1

₹10,000 shares

Explanation:

For every 3 shares applied, company had allotted 2 shares. It means that when the company allotted 60,000 shares, the shares applied for this would have been `60,000 xx 3/2 = 90,000` shares.

No. of shares on which application money was refunded = 1,00,000 − 90,000

= 10,000 shares