Underwriting of Shares & Debentures – Corporate and Management Accounting MCQ

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Underwriting of Shares & Debentures – Corporate and Management Accounting MCQ

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Abrol Ltd. offered to the public 5.0, 9% mortgage debentures of ₹ 100 each at ₹ 105, and 80% of the issue was underwritten by Smart Bulls for commission @ 2.5%. Applications were received from the public for 4,000 debentures which were allotted. The balance Sheet will tally at

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Biggie Ltd. made an issue of 10,000, 10% mortgage debentures of ₹ 100 each at ₹ 96. The whole of the issue was underwritten by Smart Bulls. 8,500 debentures were applied for and allotted to the public. The underwriters discharged their liability and were paid commission at the rate of 2% on the nominal value of the debentures. Which of the following statement is correct?

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MMW Ltd. made an issue of 47.0, 10% mortgage debentures of ₹ 100 each at par. The whole of the issue was underwritten by Y & Co. 39,950 debentures were applied for and allotted to the public. Net liability of underwriter to take a number of debentures will be

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X Ltd. entered into an underwriting agreement with Y Ltd. for the commission of 2.5% for 60% of the issue of ₹ 50,00,000,15% Debenture with a firm underwriting of ₹ 5,00,000. Marked applications were for ₹ 35,00,000 debenture. Net liability of underwriter =?

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Z Ltd. entered into an underwriting agreement with B Ltd. for the commission of 2.5% for 60% of the issue of ₹ 35,00,000,15% Debentures with a firm underwriting of ₹ 3,50,000. Marked applications were for ₹ 24,50,000 debentures. Calculate the commission payable to the underwriter.

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LG Ltd. issued 10,000 shares of ₹ 100 at a premium of ₹ 15 each. 90% of the issue was underwritten by M/s. X & Co. at a commission of 196 on the nominal value. Applications were received for 8,000 shares and allotment was fully made. All money was received in one installment. The net amount to be received from the underwriter at the time of allotment of shares is

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XM Ltd. issued 25,000 shares of ₹ 100 at a premium of ₹ 15 each. 9096 of the issue was underwritten by M/s. U WB & Co. at a maximum commission allowed under the Companies Act, 2013. Applications were received for 8,000 shares. Commission =?

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NZ Ltd. issued 34,000 shares of ₹ 100 at a premium of ₹ 15 each. 90% of the issue was underwritten by M/s. Broker & Co. Applications were received for 27,200 shares and allotment was fully made. Net liability of underwriter for shares =?

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Cybertech Ltd. issued 1,00,000 shares for public subscription and these were underwritten by A, B, and C in the ratio of 25%, 30%, and 45% respectively. Applications were received for 80,000 shares and of these applications for 16,000 shares had the stamp of A, those for 20,000 shares had the stamp of B and those of 24,000 shares had the stamp of C. The remaining applications did not bear any stamp. Net liability of underwriters in shares is: A B C

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LPG Ltd. issued 32,000 shares which were underwritten as follows:A: 19,200 shares, B: 8,000 shares & C: 4,800 shares.The underwriters made applications for firm underwriting asA: 2,560 shares, B: 960 shares & C: 3,200 shares.Details of the marked application areA: 3,200 shares, B: 6,400 shares and C: 1,600 shares.Unmarked applications are for 11,520 shares. Find out the net liability of individual underwriters.

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Who of the following generally acts as an underwriter?

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An underwriter

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A broker

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Applications bearing the stamp of the respective underwriter are called as:

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Unmarked application has to be distributed to underwriters in the ratio of

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A definite commitment by the underwriter to take up a specified number of shares or debentures of a company irrespective of the number of shares or debentures subscribed for by the public is known as

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In case of issue of shares, the rate of underwriting commission paid or agreed to be paid shall not exceed:

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In case of issue of debentures, underwriting commission shall not exceed

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In case of issue of shares, the under-writing commission shall not exceed

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