What is the company authorized share authorized share capital?

Mammy Plc, whose nominal capital is made up of 5,000,000 ordinary shares at 50K each, decide to offer 80% of it to the public and realized only 50% of the amount due.

A. N4,000,000
B. N5,000,000
C. N7,500,000
D. N2,500,000

Correct Answer:

Option D – N2,500,000

Explanation

From the calculation made we arrived at the answer and using the formula.

Nominal capital is the same as authorized x capital

The price per share is 50K

∴ Authorized share capital

=N5000000 x 0.50K

= N2,500,000