When a Company Redeems Preference Shares

question 17

Multiple Choice

When a company redeems preference shares:

• A) It must ensure it has sufficient cash reserves to do so.
• B) It must do so out of profits other than those available for the issuing of dividends.
• C) It must issue fresh shares to fund the redemption.
• D) None of the given answers are correct.

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Definitions:

Credibility

The quality or power of inspiring belief or trust in others, often based on expertise, reliability, and honesty.

Mixed Signals

Type of message in which the sender might recommend one thing to others yet behave in another way.

Defensive Communication

Tendency to receive messages in such a way that one’s self-esteem is protected.

Self-Esteem

An individual's subjective evaluation or perception of their own worth, encompassing beliefs about oneself (e.g., "I am competent," "I am worthy") and emotional states such as triumph, despair, pride, and shame.