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JAMB Commerce 1997 Question 18

Question 18

Business Calculations

A public limited liability company having a nominal capital made up of 200 000 ordinary shares of 50k each decided to issue 50% of it to the public. What is the authorized capital?

  1. A.₦40 000
  2. B.₦50 000
  3. C.₦100 000
  4. D.₦200 000
Show the answer and explanation

Answer: C (₦100 000)

Explanation

Authorised capital = 200 000 × ₦0.50 = ₦100 000. Issuing 50% to the public only affects the issued capital (₦50 000).