When shares are over-subscribed, directors may decide to scale down the number of shareholding by alloting shares at ___
- discount
- par
- premium
-
prorata
The correct answer is: D
Explanation
This method distributes shares proportionally to the number of shares applied for by each investor. For example
if an investor applied for 100 shares and the overall subscription is 200% (twice the offered amount), they migh receive a prorated allocation of 50 shares (100 shares requested / 2 (oversubscription factor) = 50 shares allocated).