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Question
Debentures represent ______.
Options
Fixed capital of the company.
Permanent capital of the company.
Fluctuating capital of the company.
Debt capital of the company.
Solution
Debentures represent debt capital of the company.
Explanation:
Debentures are a company's borrowed funds. Because debenture holders are the company's creditors, they are known as creditorship securities. Debenture capital may, therefore, be called debt capital. A debenture is a document or certificate issued by a company under its seal to acknowledge its debt.
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