A premium on ordinary shares:A) Is the amount paid in excess of par by purchasers of newly issued shares.B) Is the difference between par value and issue price when the amount paid is below par.C) Represents profit from issuing shares.D) Represents capital gain on sale of shares.E) Is prohibited in most states.

Question

A premium on ordinary shares:A)  Is the amount paid in excess of par by purchasers of newly issued shares.B)  Is the difference between par value and issue price when the amount paid is below par.C)  Represents profit from issuing shares.D)  Represents capital gain on sale of shares.E)  Is prohibited in most states.

Joseph stjean · Accepted Answer

Final Answer : A, Explanation :  A premium on ordinary shares is the amount paid in excess of par by purchasers of newly issued shares.

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