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Question
Differentiate between convertible and non-convertible debentures.
Distinguish Between
Solution
- Convertible Debentures: Such debentures carry an option to their holders to convert their holdings into equity shares after a specified period. The debenture holders can become shareholders. These debentures are more attractive for investors.
- Non-convertible Debentures: The holders of such debentures have no right to get them converted into shares. They always remain creditors of the company.
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