Out of profits available for dividend
From the issue of new shares
Partially from available profits and partially from issue of new shares
All are correct
Answer is Right!
Answer is Wrong!
The correct answer is D. All are correct.
Section 55 of the Companies Act 2013 states that a company may redeem any of its preference shares at any time after the expiry of five years from the date of its issue, subject to the following conditions:
- The redemption must be out of profits available for dividend or out of the proceeds of a fresh issue of shares made for the purpose of redemption.
- The redemption must be approved by a special resolution passed by the company at a general meeting.
- The redemption must be announced to the shareholders at least 30 days before the date of redemption.
The Act does not specify how the redemption of preference shares should be funded. However, the three options listed in the question are all possible methods of funding redemption.
Option A: Redemption out of profits available for dividend
This is
75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z"/> Subscribe on YouTube