Question
MNS Ltd issues redeemable preference shares with cumulative dividend ratio at 7%. MNS Ltd has to pay dividend on the shares every year and has
MNS Ltd issues redeemable preference shares with cumulative dividend ratio at 7%. MNS Ltd has to pay dividend on the shares every year and has the contractual obligation to redeem the shares for cash at the expiration date.
How MNS Ltd should recognise the preference shares?
Group of answer choices
Recognise part of the preference shares as financial liabilities and part of them as equity instruments
Recognise the preference shares as financial assets
Recognise the preference shares as equity instruments
Recognise the preference shares as financial liabilities
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