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2014 September Past Year

R

Robert

Very Active Member
A company has issued £0.25 shares at a premium of £0.20 per share. The
shareholders have each paid £0.22 for each share that they hold. What is the
maximum liability that each shareholder might bear with respect to each share in the
event that the company cannot pay its liabilities?
A £0.03
B £0.20
C £0.23
D £0.25

ans is C for this why?
 
When shares are issued at a premium, the amount received from them is first allocated to the premium, and the remaining as a part of share issuance. So, as they have paid 0.22, they have paid their share of premium, 0.2, and 0.02 part of their share issuance. So they have yet to pay the remaining 0.23 part of their share issuance, and not their premium. That is why the 0.23 is their liability.
 
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