A characteristic of redeemable preference shares is that:
A)the company is required to pay any accumulated preference dividends before a distribution can be made to ordinary shareholders.
B)they may be re-purchased by the company out of profits or the proceeds of a new share issue.
C)they may be converted into ordinary shares.
D)such shareholders may be entitled to a return in excess of the stated preference dividend rate.

Question

Quizplus · Accepted Answer

Redeemable preference shares can be repurchased by the company, typically out of profits or from the proceeds of a new share issue, as they have a set redemption date or condition.

A Characteristic of Redeemable Preference Shares Is That