Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Issue and Redemption of Debentures

Question:

The holders of the debenture are generally qualified/eligible for which of the following?

Options:

Fixed-rate interest

Company's voting rights

Firm's profit share

Fixed dividend

Correct Answer:

Fixed-rate interest

Explanation:

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.