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Question
PQR Ltd. issued 50,000 equity shares the whole of the issue was underwritten as follows :
A : 40% B : 30% C: 30%
Application for 40,000 shares were received in all , out of which application for 10,000 shares had the stamp of A : those for 5,000 shares that of B and those for 10,000 shares that of C. The remaining application for 15,000 shares did not bear any stamp.
Determine the liability of the underwriters
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Solution
| A (40% of Shares) | B (30% of Shares) | C (30 % of Shares) | |
| Gross Liability in the agreed Ratio of 40: 30: 30 | 20,000 | 15,000 | 15,000 |
| Less : Marked Applications | 10,000 | 5,000 | 10,000 |
| Balanced Left | 10,000 | 10,000 | 5,000 |
| Less : Unmarked Applications in the Ratio of Gross liability, i.e. 40 :30: 30 | 6,000 | 4,500 | 4,500 |
| 4,000 | 5,500 | 500 |
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Underwriting of Shares and Debentures Problems
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