A company makes an advertisement of shares to collect a capital of ₹ 25 lacs.…
20172021
A company makes an advertisement of shares to collect a capital of ₹ 25 lacs. If the printed price of one share is ₹ 100, then find the number of shares circulated by the company.
- A.
20000
- B.
25000
- C.
30000
- D.
15000
Show answer & explanation
Correct answer: B
When shares are issued at their face (printed) value, the total capital raised equals the number of shares issued multiplied by the face value of one share. So the number of shares issued is obtained by dividing the total capital to be raised by the face value of one share.
Applying this to the given numbers:
Capital to be raised = ₹25 lacs = ₹25,00,000.
Printed (face) value of one share = ₹100.
Number of shares circulated = ₹25,00,000 ÷ ₹100 = 25,000.
Cross-check: 25,000 shares issued at the ₹100 face value raise 25,000 × 100 = ₹25,00,000, i.e. ₹25 lacs — exactly the capital the company set out to collect, confirming the count.