Practicing Success
A company cannot issue which of the following? |
Redeemable Equity Shares Redeemable Preference Shares Redeemable Debentures Fully Convertible Debentures |
Redeemable Equity Shares |
The correct answer is option 1- Redeemable Equity Shares. While companies can issue redeemable preference shares, redeemable debentures, and fully convertible debentures, redeemable equity shares are generally not allowed. Equity shares represent ownership in a company, and their issuance implies a permanent ownership interest in the company. Unlike preference shares or debentures, equity shares are not typically redeemable because they reflect ongoing ownership rather than a contractual obligation that can be repaid after a certain period. |