Which One of the Following Statements Regarding the Share Premium

question 10

Multiple Choice

Which one of the following statements regarding the share premium account is true?

• A) The share premium account represents part of the company's reserves.
• B) The share premium account arises when shares are issued at less than their nominal value.
• C) The share premium account can only exist when the company has issued preference shares.
• D) The share premium account increases when an existing shareholder sells their shares for more than they cost.

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Definitions:

Stoichiometry

The calculation of reactants and products in chemical reactions based on the conservation of mass.

Chemical Reactions

Processes in which one or more substances, the reactants, are converted to one or more different substances, the products.

Chemical Equations

Chemical equations are symbolic representations of chemical reactions, depicting the reactants and products, their phases, and the stoichiometric relationships between them.

HCl

Hydrochloric acid, a strong corrosive acid that is used in chemical synthesis and as a digestive aid in the human stomach.