When a Company Redeems Preference Shares

question 63

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) It must create a capital redemption reserve that needs to be maintained separately to share capital.
• E) None of the given answers

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