Question

1) Ordinary shares are a class of shares that typically ranks last in terms of any distribution of capital. Holders have voting rights, and will receive dividends at the discretion of the directors.

A. Ture

B. false

2) 'Share buybacks' occur when a company buys back some of the ordinary shares held by existing shareholders.

A. Ture

B. false

3) For compound financial instruments, if the conversion of the securities to shares is the probable outcome, the securities would meet the criteria for recognition as liabilities in the AASB Conceptual Framework, and under AASB 132 the securities would not have an equity component.

A. Ture

B. false

Answer 1

1) Ordinary shares are a class of shares that typically ranks last in terms of any distribution of capital. Holders have voting rights, and will receive dividends at the discretion of the directors.

A. Ture
These are common shares that are true owners of the company and therefore the income is distributed to them after all the expenses and reserves.

2) 'Share buybacks' occur when a company buys back some of the ordinary shares held by existing shareholders.

A. Ture
When a company buys its own existing shares from the shareholders is known as 'Share buybacks'.