Question

S1: Redeemable shares may be taken up or purchased by the corporation even in the absence of surplus profits

S2: Treaury shares may be reissued for a reasonable price even below par value.
A. Both are false
B. Both are true
C. Only S1 is true
D. Only S1 is false

Answer 1

Both statements regarding redeemable shares, which can be repurchased by the corporation without surplus profits, and treasury shares, which can be reissued below par value, are true.

Step-by-step explanation:

The question is concerned with the issuance and buy-back of shares by a corporation, specifically redeemable shares and treasury shares. Redeemable shares are those which the company can buy back from the shareholders at future dates, and these can often be repurchased out of capital, not just surplus profits. On the other hand, treasury shares refer to a company's own previously issued stock that has been bought back from shareholders and held by the company. These shares may be resold, and they can indeed be reissued for any reasonable price, including below par value, if such an action is compliant with corporate bylaws and relevant regulations. Therefore, the correct answer is that both statements S1 and S2 are true.