[amp_mcq option1=”Payment of dividends” option2=”Issue of bonus shares” option3=”Remuneration to management” option4=”Any other business Purpose” correct=”option4″]
The correct answer is D. Any other business purpose.
Share premium is the excess of the issue price of a share over its par value. It is a capital reserve that can be used for any purpose that is beneficial to the company, such as:
- Paying off debt
- Investing in new projects
- Repurchasing shares
- Increasing the company’s cash reserves
Share premium cannot be used to pay dividends or to remunerate management.