From the point of view of Tenure, debentures can be of following types:
(A) Reedemable Debentures
(B) Non-Convertible Debentures
(C) Perpetual Debentures
(D) Registered Debentures
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- (A) and (C) only.
There are 2 types of debentures are from the point of view of the tenure of debentures.
From the Point of view of Tenure:
(a) Redeemable Debentures: Redeemable debentures are those which are payable on the expiry of the specific period either in lump sum or in Instalments during the life time of the company. Debentures can be redeemed either at par or at premium.
(b) Irredeemable Debentures: Irredeemable debentures are also known as Perpetual Debentures because the company does not give any undertaking for the repayment of money borrowed by issuing such debentures. These debentures are repayable on the winding-up of a company or on the expiry of a long period.