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When is a share said to be at a premium?

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Question

When is a share said to be at a premium?

Options

  • When \( \text{MV} = \text{FV} \)

  • When \( \text{MV} > \text{FV} \)

  • When the dividend is distributed among shareholders

  • When \( \text{MV} < \text{FV} \)

MCQ
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Solution

A share is at a premium when Market Value is more than Face Value (MV > FV). When MV = FV the share is at par, and when MV < FV it is at a discount.

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