Skip to main contentSkip to solution

Most companies raise long-term funds through debentures. Identify incorrect statements regarding debentures.

(A) Debenture holders enjoy voting rights.

(B) A company may issue different kinds of debentures, like Secured Debentures, Unsecured Debentures, Redeemable Debentures, Irredeemable Debentures, Convertible Debentures, Non-convertible Debentures.

(C) A debenture is a part of the owned capital.

(D) The return on Debenture is known as dividend.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

Debenture holders are creditors, not owners: they carry no voting rights, so (A) is incorrect. Debentures form part of borrowed capital and not owned capital, so (C) is incorrect. Their return is interest, a fixed charge against profit, not dividend, so (D) is incorrect. Only (B), listing the recognised kinds of debentures, is correct.

Keyboard Shortcuts

  • Left arrow: Previous question
  • Right arrow: Next question
  • S key: Jump to solution
  • Q key: Jump to question