Capital redemption reserve is created out of __________.

Dividend equilisation fund

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P/L Account

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General reserve account

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All of the above

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Solution

The correct option is D All of the above
When shares are redeemed, company have to replenish the capital by issue of fresh share or to create a capital reserve equivalent to the amount of share capital redeemed.
Capital redemption reserve can be created out of dividend equalization fund, profit & loss account and general reserve account.

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