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Question
A Debenture issued by a company by creating a fixed or a floating charge on the company's assets is known as ______.
Options
Non-Convertible Debenture
Mortgage Debenture
Redeemable Debenture
Unsecured Debenture
Solution
A Debenture issued by a company by creating a fixed or a floating charge on the company's assets is known as Mortgage Debenture.
Explanation:
A mortgage debenture is secured by the issuing company's real estate or other physical assets. These assets act as collateral for debenture holders in case the company fails to make payments. If the corporation fails to meet its commitments, debenture holders can assert their claim on the mortgaged assets to recoup their investment.
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