Question

Read the following news item regarding issue of shares by TVS Supply Chain and answer the question that follows:

Which of the following options can TVS Supply Chain avail to deal with its over-subscribed shares?

P: Reject all the over-subscribed shares and refund the excess application money.

Q: Allot all shares applied for on a pro-rata basis.

R: Allot all shares applied for.

S: Allot in full to some applicants, allot shares on a pro-rata basis to a few applicants and refund the application money to some applicants.

Options

• P, Q and R

• Q, R and S

• P, R and S

• P, Q and S

Answer 1

P, Q and S

Explanation:

Subscribed capital cannot exceed issued capital. Hence, TVS Supply Chain cannot allot all the shares applied for, as the number of shares applied for exceeds the number of shares issued for subscription.