Question

Assertion (A): Forfeited shares may be reissued by the company at a discount but the amount of discount cannot be more than the amount forfeited on the reissued shares.

Reason (R): It being sale of shares and not an issue of shares, the company can reissue them at any price.

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

Options

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