Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

How can investors apply for debentures?

Options:

Only through direct contact with the company's management

Based on recommendations from existing debenture holders

On the basis of the company's annual report

On the basis of the prospectus issued by the company

Correct Answer:

On the basis of the prospectus issued by the company

Explanation:

Investors can apply for debentures by referring to the prospectus issued by the company. The prospectus is a detailed document that provides essential information about the debenture offering, including its terms, conditions, interest rates, maturity dates, and other relevant details. It serves as a formal invitation to potential investors, outlining the terms of the debenture issuance and the procedures for application.