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Question
Explain the following term/concept.
Debentures
Solution
Debentures are debt instruments issued by a company to raise capital. Debenture capital is the borrowed capital of a company. A debenture is an acknowledgement of the debt. Debentures are issued for a specific period and it carries a fixed rate of interest as a return on the investment in debentures.
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RELATED QUESTIONS
Select the correct answer from the options given below and rewrite the statement.
Borrowed Capital is provided to the company by ______.
Select the correct answer from the options given below and rewrite the statement.
______ is an acknowledgement of debt issued by the company under common seal.
Match the pairs.
| Group ‘A' | Group ‘B' |
| a) Debentureholder | 1) Borrowed Capital |
| b) Interest on Debentures | 2) Interest coupons |
| c) Convertible Debentures | 3) Evidence of Loan |
| d) Debenture Certificate | 4) Safe and secured investment |
| e) Investment in Debentures | 5) Interest warrant |
| f) Redeemable Debentures | 6) Conversion into Debentures |
| g) Debentures | 7) Risky investment |
| 8) Evidence of shares | |
| 9) Creditor | |
| 10) Conversion into equity shares | |
| 11) Redeemed after fixed period | |
| 12) Redeemed at winding up of company | |
| 13) Owner | |
| 14) Owned Capital |
State whether the following statement is true or false.
Interest on debentures is paid notwithstanding the volume of profit.
State whether the following statement is true or false.
Debentures are never redeemed by the company.
Find the odd one.
Find the odd one.
Find the odd one.
Find the odd one.
Complete the sentence.
Company issues ______ certificate to the debenture holder after allotment of debentures.
Complete the sentence.
Company cannot issue debentures with ______ rights.
Complete the sentence.
A company cannot issue debentures to more than 500 people without appointing a ______.
Complete the sentence.
The power to issue debentures has been vested with the ______.
Select the correct option.
Return on Debentures ____________.
Select the correct option.
____________ Debentureholders.
Answer in one sentence.
What is debenture?
Answer in brief.
What are the circumstances under which correspondence can be made with debenture holders?
