Suvidha Ltd. was on the verge of expansion. It was requiring ₹40 lakhs for modernisation of its Machinery. It decided to issue Rs.30 lakhs, 7% debentures to public for cash and to borrow ₹10 lakhs from SBI Bank as long term loan, with a condition from SBI to issue ₹12 lakhs. 7% debentures as a subsidiary security besides the primary security, to which the company agreed. The face value of 7% debenture was ₹100.
Select the number of 7% debentures issued to public.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 30,000.
Issue Rs.30 lakhs, 7% debentures to public
Face value of 7% debenture was ₹100
Total value = 30 lakhs and face value = 100
No of debentures = 30,00,000/100
= 30,000