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Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders. Reason (R): Debenture holders have voting rights. -

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Question

Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.

Reason (R): Debenture holders have voting rights.

Options

  • Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

  • Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

  • Assertion (A) is true, but Reason (R) is false.

  • Assertion (A) is false, but Reason (R) is true.

MCQ
Fill in the Blanks

Solution

Assertion (A) is true, but Reason (R) is false.

Explanation:

The issuance of a debenture does not dilute the interest of equity owners because they do not have the right to vote or participate in the company's management.

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Issue of Debentures
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