Question

Which of the following is NOT the feature of a debenture?

1. Has the right to elect directors
2. Have a residual claim in the company
3. Debentures generally carry no voting rights
4. Represent borrowed funds

Options

• I & II

• II & III

• III & I

• Only IV

Answer 1

I & II

Explanation:

Debentures are debt instruments representing borrowed funds and generally carry no voting rights; debenture-holders are creditors, so they lack residual claims and cannot elect directors.