Debentures can be redeemed in following ways except-

The correct answer is Option (4) → Payment in fixed asset

The book gives four ways of redeeming debentures: payment in lump sum, payment in instalments, purchase in the open market, and conversion into shares or new debentures. Payment in a fixed asset is not one of them.

Option (1) Payments in installments — A true statement. Debentures are repaid in parts over the years, often by draw of lots.

Option (2) Purchase in open market — A true statement. The company buys back its own debentures from the market and cancels them.

Option (3) Payment in lump sum — A true statement. The whole amount is paid at maturity.