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State whether the following statement is True (T) or False (F): Debentures cannot be converted into shares.

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Question

State whether the following statement is True (T) or False (F):

Debentures cannot be converted into shares.

True or False
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Solution

This statement is false.

Explanation:

A company can issue Convertible Debentures, which give the holder the option to exchange their debt holdings for equity or preference shares after a specified period, on predetermined terms.

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Chapter 2: Issue and Redemption of Debentures - Intext Questions [Page 109]

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NCERT Accountancy Company Accounts and Analysis of Financial Statements [English] Class 12
Chapter 2 Issue and Redemption of Debentures
Intext Questions | Q 6. | Page 109
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