The premium, if any is payable on redemption that must be provided for out of _________.

securities premium or any profits

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divisible profits only

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securities premium only

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securities premium or divisible profits

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Solution

The correct option is A securities premium or any profits
As per Sec 80 of Companies Act, before the preference shares are redeemed, the premium, if any payable on redemption must be provided for out of the profits of the company or out of Share Premium Account.

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