Company Accounting Study Set 1
Quiz 2: Financing Company Operations
Redeemable Preference Shares Are Always Considered to Be Compound Financial
Redeemable preference shares are always considered to be compound financial instruments that contain both equity and liability components.
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Only fully paid-up preference shares can be redeemed by a company.
Share splits and share consolidations are only allowed if a company's constitution contains specific provisions relating to such transactions.
If a company uses its surplus cash reserves to buy-back its own shares,the total equity of the company will increase by the equivalent amount of cash spent.
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