The holders of the debenture are generally qualified/eligible for which of the following? |
Fixed-rate interest Company's voting rights Firm's profit share Fixed dividend |
Fixed-rate interest |
The correct answer is option 1- Fixed-rate interest. The holders of the debenture are generally qualified/eligible for Fixed-rate interest. Debenture holders receive a fixed interest on their investment, but they do not typically have voting rights, nor do they share in the company’s profits. Debentures are debt instruments, not equity, so the holders are paid interest, not dividends. Debenture holders receive fixed interest payments at predetermined intervals from the issuing company. This interest rate is specified in the debenture terms and remains constant throughout the tenure of the debenture. |