The term redeemable is used fora)Public depositsb)Preference sharesc)Equity sharesd)Commercial paperCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Bbb preference shares

Answer

Reedemable means preference shares got money back at a fixed period of time .... at a expiry date but equity shares got at the time of winding up not in btween that's why ans is b

Answer

Preference share is the right answer. It is a type of preference share. I think redeemable preference share are those shares which can be converted into equity shares after a period if shareholder wants.

Answer

The term “Redemption” refers to “Repayment”. So paying of entire amount which is due to preference share holders with agreed rate of dividend is known as “ Redemption of preference shares” It may be at par value or more than par value. But that would be depend upon the agreement between sharehlders and company.

Answer

B) Preference shares is the right answer
Redeemable shares issued on the terms that. the company will buy them in future .It is used for preference shares.

Answer

Redeemable Preference Shares

The term 'redeemable' is used to refer to redeemable preference shares. Redeemable preference shares are a type of preference shares that can be redeemed or repaid by the company after a certain period of time. This means that the company has an obligation to repay the initial investment made by the shareholders at some point in the future.

Preference Shares

Preference shares are a type of shares issued by a company that gives the shareholders certain preferential rights and privileges over ordinary shareholders. These rights may include a fixed dividend rate, priority in receiving dividend payments, preference in the distribution of assets during liquidation, and the right to be repaid their initial investment before ordinary shareholders.

Key Features of Redeemable Preference Shares

- Redemption: Redeemable preference shares have a specific redemption date or a period during which the company can redeem the shares. This means that the company can buy back the shares from the shareholders at a predetermined price.

- Fixed Dividend: Redeemable preference shareholders are entitled to receive a fixed dividend rate, which is usually higher than the dividend rate paid to ordinary shareholders. The fixed dividend is typically expressed as a percentage of the face value of the shares.

- Repayment of Capital: One of the key features of redeemable preference shares is that the company has an obligation to repay the initial investment made by the shareholders. This repayment can happen at the time of redemption or at a specified date in the future.

- Non-Voting Rights: Redeemable preference shareholders usually do not have voting rights in the company's general meetings. This means that they do not have a say in the decision-making process of the company.

Advantages of Redeemable Preference Shares

- Flexibility: Redeemable preference shares provide flexibility to the company as they can be redeemed after a certain period of time. This allows the company to manage its capital structure and financial obligations more effectively.

- Reduced Financial Risk: Redeemable preference shares provide a fixed dividend rate, which allows the company to reduce its financial risk compared to ordinary shares, where the dividend payment is not fixed.

- Attractive to Investors: Redeemable preference shares can be attractive to investors who are looking for a fixed income stream and a relatively safer investment option compared to ordinary shares.

In conclusion, the term 'redeemable' is used for redeemable preference shares, which are a type of preference shares that can be repaid or redeemed by the company after a specific period of time. These shares provide certain advantages to both the company and the investors, including flexibility, reduced financial risk, and a fixed income stream.

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