Total cost of machine = Rs. 3,80,000
Amount paid in cash = Rs. 20,000
Balance to be paid through shares = Rs. 3,80,000 - Rs. 20,000 = Rs. 3,60,000
Face value of each share = Rs. 100
Premium = 20% of Rs. 100 = Rs. 20
Issue price per share = Rs. 100 + Rs. 20 = Rs. 120
Number of shares issued = Issue Price per ShareBalance Amount
Number of shares issued = 1203,60,000 = 3,000 shares
The company needs to issue 3,000 shares at Rs. 120 each (including 20% premium) to settle the balance payment of Rs. 3,60,000 for the machine purchase.
Correct Option: 3