GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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According to guidelines issued by SEBI, a new company set up by entrepreneurs without a track record can issue capital to public only
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At par
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At discount
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At premium
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All of the above
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Explanation:
Detailed explanation-1: -Current norms require public shareholders to own a minimum of 25% stake in a listed entity. The regulator has allowed promoters and promoter group entities to sell shares to exchange traded funds to meet the public shareholding norms.
Detailed explanation-2: -1. A new company which has not completed 12 months of commercial operations will not be allowed to issue shares at a premium. 2. If an existing company with a 5-year track record of consistent profitability, is promoting a new company, then it is allowed to price its issue.
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