From the following select the method(s) of Redemption of Debentures.
(A) Lumpsum payment made at the end of specified period of time.
(B) Instalment payments made by drawing of lots.
(C) Purchase from open market
(D) Selling fixed Assets in open market
(E) Conversion into shares or new debentures
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (B), (C) and (E) only
The book names four methods of redemption: payment in lump sum, payment in instalments, purchase in the open market and conversion into shares or new debentures.
(A) Lumpsum payment made at the end of specified period of time — True. Paid in one sum on maturity.
(B) Instalment payments made by drawing of lots — True. The debentures to be redeemed each year are picked by lots.
(C) Purchase from open market — True. The company buys its own debentures and cancels them.
(D) Selling fixed Assets in open market — False. Sale of assets may raise cash, but it is not a method of redemption.
(E) Conversion into shares or new debentures — True. Debentureholders may take shares or a new class of debentures.
NCERT (2026-27 edition):
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