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    PracticeACCAACCA LW — Corporate and Business Law Practice Exam 4Question 36
    Easy1 markMultiple Choice
    Corporate and Business LawSection ASyllabus ECapital and Financing

    ACCA · Question 36 · Corporate and Business Law

    What is the legal term for shares that a company has bought back from its shareholders and holds in its own name, rather than cancelling them?

    Answer options:

    A.

    Preference shares

    B.

    Deferred shares

    C.

    Treasury shares

    D.

    Bonus shares

    How to approach this question

    Identify the terminology for repurchased shares.

    Full Answer

    C.Treasury shares✓ Correct
    When a company purchases its own shares out of distributable profits, it can choose to hold them 'in treasury' rather than cancelling them. These are called treasury shares. They do not carry voting rights or dividend rights while held by the company.

    Common mistakes

    Confusing treasury shares with unissued authorized share capital.
    Question 35All questionsQuestion 37

    Practice the full ACCA LW — Corporate and Business Law Practice Exam 4

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