Company a Issues Preference Shares to Company B, the Terms

question 4

Multiple Choice

Company A issues preference shares to Company B, the terms of which entitle party B to redeem the preference shares for cash if Company A's revenues fall below a specified level. From Company A's perspective the preference shares are:

• A) an equity instrument
• B) a financial liability
• C) a compound financial instrument
• D) a financial asset

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Definitions:

Social Networking

The use of dedicated websites and applications to interact with other users or to find people with similar interests to oneself.

Teenagers

Individuals typically aged between 13 and 19 years, undergoing the transition from childhood to adulthood.

Ration Resources

Involves the controlled distribution of scarce resources, goods, or services in order to ensure equitable and efficient use.

Service Duration

The length of time that a service is provided or available to a client or customer.