The correct answer is: A. Call money
Call money is the money that a company demands from its shareholders after the allotment of shares. It is the amount that the shareholders need to pay to the company in order to fully subscribe to the shares that they have been allotted.
Call money is usually paid in installments, with the first installment being due on the date of allotment and the remaining installments being due on specific dates thereafter. The amount of call money that is payable by each shareholder is determined by the number of shares that they have been allotted and the face value of each share.
Call money is an important source of funding for companies, as it allows them to raise capital quickly and easily. It is also a relatively low-cost source of funding, as the interest rate on call money is usually lower than the interest rate on other types of loans.
However, call money can also be a risky source of funding for companies, as it is repayable on demand. This means that if a company’s financial situation deteriorates, it may be forced to repay its call money, even if it does not have the cash to do so. This can lead to the company going bankrupt.
Here is a brief explanation of each option:
- A. Call money is the money that a company demands from its shareholders after the allotment of shares. It is the amount that the shareholders need to pay to the company in order to fully subscribe to the shares that they have been allotted.
- B. Paid up money is the amount of money that has been paid by the shareholders for the shares that they have subscribed. It is the total of the face value of the shares and the call money that has been paid.
- C. Profit is the amount of money that a company makes after deducting its expenses from its revenue. It is the money that is left over after the company has paid its bills.
- D. Share is a unit of ownership in a company. It is a document that represents a portion of the company’s assets and liabilities.