What characteristic defines redeemable shares?

The defining characteristic of redeemable shares is that they can be bought back by the company. This means that the issuing corporation has the option or obligation to repurchase the shares at a certain price and within a specified time frame. This feature provides flexibility both for the company and the shareholders, as it allows shareholders to sell their shares back to the company after a specified period or under certain conditions.

Redeemable shares are often used by companies as a method of financing, where they can manage their capital needs while also providing an exit strategy for investors. This characteristic distinguishes redeemable shares from other types of equity, enhancing their appeal in various financial strategies.

In contrast, shares that can only be sold to other shareholders would not have the redeemable feature since it implies a restriction on the repurchase by the company. Similarly, shares that cannot be transferred or are permanent without redemption would contradict the nature of redeemable shares, which are designed specifically to allow for a return of capital to shareholders.