Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
Debenture holder generally gets which of the following?
Options:
Interest at fixed rate
Dividend from the company
Interest at fluctuating rate depending upon the company's profits
Interest at a rate prescribed by SEBI
Correct Answer:
Interest at fixed rate
Explanation:
Debentures are issued to the investors from which funds are raised. They are given debenture receipt as a promise of repayment of capital bearing a fixed rate of interest. Hence debenture holders receive interest on their investment.