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Question
Debenture holders are ______ of the company.
Options
creditors
owners
suppliers
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Solution
Debenture holders are creditors of the company.
Explanation:
Debenture holders lend money to a company by purchasing its debentures. These are a type of long-term debt instrument. Since they are not shareholders, they do not own part of the company. Regardless of the company's profits, they hold the status of creditors and are eligible to receive interest on the loaned money.
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