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Home Questions 8VFQUWYC4B
Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion (A):  The issue of debenture does not result in the dilution of interest of equity shareholders.
Reason (R): Debenture holders have voting rights.

Options:

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(A) is false, but (R) is true.

(A) is true, but (R) is false.

Correct Answer:

(A) is true, but (R) is false.

Explanation:

Issue of debenture does not result in dilution of interest of equity shareholders as they do not have right either to vote or to take part in the management of the company.

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