Which of the following activities come under the head of 'financing activities'?
A. Purchase of shares
B. Dividend payable on equity shares
C. Issue of 9% Debentures
D. Redemption of preference shares
E. Interest paid on Debentures Choose the correct answer from the options given below:
This question was previously asked in
Shift 31/05/2023 3:30 PM - 6:30 PM
A
A, B, and C only
B
B, C and D only
C
C, D and E only
D
A, C and D only
Correct Answer
C, D and E only
Detailed Explanation
A. Purchase of shares is not considered a financing activity; it's an investment activity.
B. Dividend payable on equity shares is related to equity shareholders but is not directly a financing activity.
C. Issue of 9% Debentures is a financing activity as it involves raising funds through debt.
D. Redemption of preference shares is a financing activity, as it involves reducing the company's capital structure.
E. Interest paid on Debentures is a financing activity because it's a cost associated with servicing the debt.
So, the correct answer is:
3. C, D and E only
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