The Fact That a Preference Share Is Redeemable

question 26

Multiple Choice

The fact that a preference share is redeemable:

• A) makes it a financial liability.
• B) makes it an equity instrument.
• C) makes it a compound financial instrument.
• D) does not automatically mean that it is a financial liability. Conditions and rights attaching to the share need to be considered before it can be classified as either a financial liability or equity instrument.

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Definitions:

Safety

Being safeguarded against or not prone to danger, risk, or injury.

Self-actualization

The realization or fulfilment of one's talents and potentialities, considered as a drive or need present in everyone.

Social

Relating to society or its organization; involving the gathering of individuals or communities in a structured interaction.

Personal

Pertaining to or affecting a particular person rather than anyone else, often used in the context of personalization in marketing.