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JAMB Commerce 2006 Question 15

Question 15

Business Calculations

A public company has 2 000 000 ordinary shares of 50k each and offers 50% for subscription at ₦2 per share. If the shares were fully subscribed, calculate the issued capital.

  1. A.₦4 000 000
  2. B.₦2 000 000
  3. C.₦1 000 000
  4. D.₦500 000.
Show the answer and explanation

Answer: D (₦500 000.)

Explanation

Shares issued = 50% of 2 000 000 = 1 000 000. Issued capital is counted at nominal value: 1 000 000 × 50k = ₦500 000. The extra ₦1.50 per share (₦1 500 000) goes to share premium.