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If 20,000 shares of ₹10 (₹8 paid up) are sub-divided into shares of ₹5 (₹4 paid up):
ANumber of shares doubles to 40,000
BNumber of shares stays 20,000
CNumber of shares halves to 10,000
DNumber of shares becomes 50,000
Answer & Solution
Correct answer: A. Number of shares doubles to 40,000
1. Step 1: Sub-division of ₹10 to ₹5 = 2× the number of shares.
2. Step 2: 20,000 × 2 = 40,000 shares.
3. Step 3: Hence (A).
_Source: ICAI BoS CA Inter Paper 1, Ch 14 "Internal Reconstruction"_