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maximum limit of premium for issue of equity shares for investment
Replies (2)
No maximum limit specified in companies act. It depends upon the market value of shares of the company.
Issue price of share including share premium is a subject matter of financial planning and negotiation between company and its share holders.
Shares are issued at premium with a view to strengthen capital base keeping share capital low so that servicing of share capital (by paying dividend and issue of free shares/s bonus shares) is easy and better in future.
One important aspect about share premium about dividend can be illustrated with example of shares, market price of share and dividend yield.
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