Question

Which of the following are the features of debenture?

Options

• Debentures represent borrowed funds.

• Interest on debentures is paid at a fixed rate.

• Debentures generally carry voting rights.

• Debentures does not involve a charge on the assets of the company.

Answer 1

Debentures represent borrowed funds and interest on debentures is paid at a fixed rate.

Explanation:

The main features of debentures are as follows:

1. Debentures represent borrowed funds.
2. Interest on debentures is paid at a fixed rate.
3. Interest is payable every year irrespective of whether there are profits or not.
4. Debentures generally carry no voting rights.