\textbf{Case Study Description:}Review the share allotment data for Eicher Ltd. to answer the questions:Eicher Ltd. issued equity shares of each at a premium of per share, payable as follows:\begin{itemize}\item On Application: per share\item On Allotment: per share (including Premium)\item On First Call: per share (including Premium)\item On Final Call: Balance amount\end{itemize}Applications were received for shares. The Directors allotted shares on a pro-rata basis to applicants who applied for shares, rejecting the remaining applications. The excess application money received was adjusted against the amount due on allotment. All amounts due were received except for the first call from Rahul, who had applied for shares. His shares were forfeited immediately after the non-payment of the first call. These forfeited shares were later reissued at the minimum possible reissue price.Identify the ratio in which the shares were allotted on a pro-rata basis:
- A50:72
- B72:50
- C13:10
- D10:13
Solution & Step-by-step Explanation
The pro-rata allotment category consists of the shares that were accepted and allocated fractional stakes:\begin{itemize}\item Number of shares applied for in this category \item Total shares allotted to these applicants \end{itemize}To find the pro-rata allotment ratio, we compare the allotted shares to the applied shares:
Dividing both terms by simplifies the ratio to:
Dividing both terms by simplifies the ratio to: