ABC Ltd. has paid-up equity capital of 10,00,000 equity shares of Rs. 10 each fully paid-up. Position of reserves is as follows: General Reserve = Rs. 30,00,000
Profit & Loss Account — Rs. 2,00,000
Securities Premium = Rs. 2,00,000
Company decided to buy back 2,00,000 equity shares of Rs. 10 each at 25% premium. For this purpose, the company sold the entire investments at Rs. 12,00,000 (book value Rs. 10,00,000) and made a fresh issue of 10% preference shares of Rs. 100 each to the extent minimum after utilizing the securities premium account and half of general reserve. How much preference shares must be issued by the company so that provisions of the Companies Act, 2013 get complied?
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