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    Question

    The underwriting commission in case of issue of debentures can't exceed _______.

    A

    2%

    B

    2.5%

    C

    3%

    D

    5%

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    स्रोत : www.toppr.com

    The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer?

    Option A 2.5% is the correct answer in case of debentures

    CA Foundation Question  >  The underwriting commission in case of issue ...

    The underwriting commission in case of issue of debentures can’t exceed:

    a) 3% b) 2.5% c) 4% d) 5%

    Correct answer is option 'B'. Can you explain this answer?

    Related Test

    Test: Issue Of Debentures - 1

    Answers

    Dashvanth Kumar Nov 26, 2018 Related

    The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer?

    Option A 2.5% is the correct answer in case of debentures

    Upvote | 2 Reply

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    According to Companies Act, underwriting commission should not exceed 5 per cent of the nominal value of a share and 2½ per cent in the case of debentures.

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    Question Description

    The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2022 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2022 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The underwriting commission in case of issue of debentures can’t exceed:a)3%b)2.5%c)4%d)5%Correct answer is option 'B'. Can you explain this answer?.

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    स्रोत : edurev.in

    [Solved] What rate should the commission payable on the issue of debe

    Meaning and Nature of Underwriting: ​Underwriting in the context of a company means undertaking a responsibility or giving a guarantee that the securities

    Home Accountancy Corporate Accounting Debentures

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    What rate should the commission payable on the issue of debentures not exceed?

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    2 ½ % 3% 4% 5%

    Answer (Detailed Solution Below)

    Option 1 : 2 ½ % Crack with

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    Meaning and Nature of Underwriting:

    ​Underwriting in the context of a company means undertaking a responsibility or giving a guarantee that the securities (shares and debentures) offered to the public will be subscribed for.

    The firms which undertake the guarantee are called ‘underwriters’.

    Underwriting is similar to insurance in the sense that it provides protection to the issuing company against the failure of an issue of capital to the public.

    Underwriting Commission:

    According to Sec. 76 of the Companies Act, 1956, the payment of underwriting commission is made if the following conditions are satisfied:

    The payment of commission is possible only when the same is authorized by the Articles;

    The commission paid or agreed to be paid does not exceed

    In the case of shares, 5% of the price at which the shares are issued or the amount or rate authorized by the Articles, whichever is less, and

    In the case of debentures, 2½% of the price at which the debentures are issued or this amount or rate authorized by the Articles, whichever is less;

    Hence, the maximum rate of commission on the issue of shares is 5% and on the issue of Debentures @ 2½% at which the shares or debentures are issued.

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