πŸ“’ Too many exams? Don’t know which one suits you best? Book Your Free Expert πŸ‘‰ call Now!

  • google app store apple app store
  • βœ–

      Question

      In a buyback of shares, which reserve is typically used

      for purchase of own shares in companies law contexts?
      A Capital redemption reserve (if issued bonus before buyback) Correct Answer Incorrect Answer
      B Revaluation reserve directly used always Correct Answer Incorrect Answer
      C Any reserve except free reserves are allowed Correct Answer Incorrect Answer
      D Share premium and free reserves are typical sources Correct Answer Incorrect Answer

      Solution

      As per typical company law provisions, buyback of shares can be financed out of free reserves (retained earnings) and/or the securities premium account.

      Practice Next
      ask-question