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Question
Explain the following term/concept.
Debentures
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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.
Debenture holders are ______ of the company.
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.
Write a word or a term or a phrase which can substitute the following statement.
The person who purchases debentures of the company.
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.
Debenture holders get regular dividend.
State whether the following statement is true or false.
Debentures are never redeemed by the company.
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.
Debenture certificate should be issued within a period of ______ months, from the date of allotment of debentures.
Select the correct option from the bracket.
| Group ‘A’ | Group ‘B’ |
| a) Return on Debentures | 1) __________________ |
| b) Debenture certificate | 2) __________________ |
| c) __________________ | 3) Debentureholders |
| d) __________________ | 4) Debenture |
| e) __________________ | 5) Power to issue debentures |
Answer in one sentence.
What is the income of debenture holder?
Correct the underlined word and rewrite the following sentence.
Debenture holders get regular dividend at fixed rate.
Answer in brief.
Which are the precautions to be taken by the Secretary while corresponding with debenture holders?
Justify the following statement.
The company secretary should take certain precautions while corresponding with debenture holders.
