Based on following, answer question.

XYZ Ltd. has been operating in the field of FMCG products in South Indian market. However to expand its operation in northen part of India, it needs additional capital ₹20,00,000 which is raised by issuing 10% Debenture of ₹12,00,000 of ₹100 issued at a discount of 10% to be repayable after 6 years. The rest of the funds is raised by issuing 5% debenture of ₹8,00,000 of ₹100 issued at 15% premium. These debentures are perpetual in nature. After six years of successful operation in northern India, company took a loan of ₹5,00,000 from PNB against 5% debenture of ₹8,00,000 of ₹100 each as a collateral security. The company successfully ran its operation and managed to pay off its loan within two years.

XYZ Ltd. issues 10% debentures of ₹12,00,000 of ₹100 each at a discount of 10% which will be repayable after 6 years. What type of debenture it is?

Redeemable Debentures

The correct answer is option 2- Redeemable Debentures.

A redeemable debenture is a type of debenture that can be redeemed or repaid by the issuer on a specific date or within a specified period of time. Debentures are debt instruments that are issued by companies and governments to raise money. They typically pay a fixed rate of interest to investors. Redeemable debentures are attractive to investors because they offer the certainty of repayment on a specific date. This makes them a good investment for investors who are looking for a fixed income and who are not comfortable with the risk of interest rate fluctuations or market volatility.