Question

Own debentures are those debentures of the company which ______.

Options

• The company allots to its own promoters

• The company allots to its Director

• The company purchases from the market and keeps them as investments

• None of the above

Answer 1

Own debentures are those debentures of the company which the company purchases from the market and keeps as investments.

Explanation:

The acquisition and cancellation of a company's own debentures in the open market for the purpose of quick cancellation is referred to as redemption by purchase in the open market. The benefit of this choice is that a corporation can redeem the debentures whenever it wants when it has extra cash. Second, the corporation can buy them at a discount when they become available in the market.