The correct answer is A. Rs. 28,800.
The company has 10% Redeemable Preference Share of Rs. 1,60,000 fully paid. This means that the company has to pay Rs. 1,60,000 to the shareholders who hold these shares. The company decided to redeem these shares at a premium of 5%. This means that the company has to pay Rs. 1,60,000 + 5% of Rs. 1,60,000 = Rs. 1,68,000 to the shareholders who hold these shares.
The company also has a share premium of Rs. 1,000. This means that the company has already received Rs. 1,000 from the shareholders who have subscribed to these shares.
The company also has a revenue reserve of Rs. 1,31,000. This means that the company has already earned Rs. 1,31,000 from its business operations.
The company decided to redeem the above shares by issue of new shares. If the new issue of shares is to be at a premium of 20%, the minimum amount of new issue will be:
= Rs. 1,68,000 – Rs. 1,000 – Rs. 1,31,000 = Rs. 28,800.
The other options are incorrect because they are either too high or too low.