Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
Why would investors prefer to invest in debenture rather than share?
Options:
Interest is charge against profit but dividend is an appropriation of profit
Debentures are mostly secured but shares are not always secured
Both of these
None of these
Correct Answer:
Both of these
Explanation:
Debentures are paid interest irrespective of profit and they are generally secured.