Question

The amount of discount on reissue of forfeited shares cannot exceed ______.

Options

• 5% of the face value

• 10% of the face value

• The amount received on forfeited shares

• The amount not received on forfeited shares

Answer 1

The amount of discount on reissue of forfeited shares cannot exceed The amount received on forfeited shares.

Explanation:

The law limits the amount of the discount on the reissue of shares that have been forfeited. Redeemed shares may be reissued by a business at par, premium, or discount; however, if they are reissued at a discount, the maximum discount that can be applied cannot be greater than the sum already paid for those shares.