12 Views

Question : Case Study: PQR Enterprises - Funding Strategies for Diversification

PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.

Questions : Equity Shares and Preference Shares

If PQR Enterprises issues redeemable preference shares, what does this mean?

Option 1: Shareholders can convert shares into debentures
 

Option 2: Preference shareholders can vote on company decisions
  

Option 3: The company has the option to buy back the shares

 

Option 4: Dividends on these shares are fixed and guaranteed


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: The company has the option to buy back the shares

 


Solution : The correct answer is (c) The company has the option to buy back the shares

Redeemable preference shares are those that the issuing company has the option to buy back or redeem after a certain period, as specified in the terms of the share issue. This provides the company with flexibility in managing its capital structure and financial obligations. It does not involve converting shares into debentures, granting voting rights to preference shareholders , or guaranteeing fixed dividends.

 

Related Questions

Great Lakes Institute of Mana...
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.8 LPA Avg. CTC for PGPM 2025
UPES | BBA Admissions 2026
Apply
#36 in NIRF, NAAC ‘A’ Grade | 100% Placement, up to 30% meritorious scholarships
Presidency University MBA Adm...
Apply
NAAC A+ Accredited | Highest CTC 10 LPA | Top Recruiters : Amazon, Accenture, KPMG, EY, Capgemini & many more
IBSAT 2025-ICFAI Business Sch...
Apply
IBSAT 2025-Your gateway to MBA/PGPM @ IBS Hyderabad and 8 other IBS campuses | Scholarships worth 10 CR
Goa Institute of Management P...
Apply
AMBA & BGA ACCREDITED | Top Recruiters-Microsoft, Bain, HSBC, Deloitte, Barclays and many more
IMT Ghaziabad PGDM Admissions...
Apply
AACSB, NBA & SAQS Accredited | H-CTC 41.55 LPA | Merit Based Scholarship
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books