Economics · Economy
Which of the following statements regarding a company's capital structure is correct according to standard accounting principles?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Dividends proposed by directors at the end of the year but not yet approved by shareholders must be recognized as a current liability.
- 2A rights issue is an offer of new shares to existing shareholders at a price usually above the current market value.
- 3Redeemable preference shares are classified as non-current liabilities, and their dividends are recognized as finance costs.✓
- 4A bonus issue of shares results in an increase in the total equity of the company.
Correct answer
Redeemable preference shares are classified as non-current liabilities, and their dividends are recognized as finance costs.
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