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What is called securities premium for the company


The difference between the nominal value of the securities and the offer price is known as the securities premium. A company may issue securities at a price which is more than the nominal value. In such circumstances, the company is understood to be making a premium issue.

What is security premium example?

Example of Share Premium Account\n\n For example, say a company issues 1,000 shares at a par value of $0.01 per share. The company actually received $15 per share during an offering. The difference between the par value and the subscription amount is the share premium.

How can securities premium be used by the company?

To write off expenses of issue of shares and debentures.

What is another name for share premium?

Share premium account may also be known as additional paid-in capital and can also be called paid-in capital in excess of par value. This account is a statutory and non-distributable reserve account. Share premium can be money received for the sale of either common or preferred stock.

Is securities premium a capital profit?

What is share premium? A share premium is a credited difference in price between the par value, or face value of shares, and the total value a company received for issued shares. You usually record the share premium as capital in the company's balance sheet.




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