What is the primary feature of redeemable shares?

Redeemable shares are designed specifically to allow a company the option to buy back the shares at a predetermined time or under certain conditions. This feature provides flexibility to the company in managing its capital structure. When such shares are issued, the terms often specify the redemption date or the conditions under which the buy-back can occur, allowing investors to understand when they can expect to receive their investment back.

This characteristic distinguishes redeemable shares from other types of shares that do not have any built-in buy-back provisions. Options that discuss a company's inability to buy back shares, claim priority over other shares, or categorize redeemable shares as a debt instrument do not accurately reflect the nature of redeemable shares. Instead, redeemable shares are equity instruments with the potential for a defined redemption mechanism, which is why the inclusion of a buy-back term on a fixed date is their primary feature.