Question : Which type of shares are redeemable?
Option 1: Equity shares
Option 2: Preference shares
Option 3: Debentures
Option 4: GDRs
Correct Answer:
Preference shares
Solution : The correct answer is (b) Preference shares
Preference shares are the type of shares that are redeemable. Redeemable preference shares have a predetermined maturity date or a specific period after which the issuing company has the option to repurchase or redeem the shares from the shareholders. Redeemable preference shares provide the company with flexibility as they can be redeemed at a future date or upon meeting certain conditions. The redemption may involve returning the original investment amount or a premium specified at the time of issuance.
