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What distinguishes convertible debentures from non-convertible debentures? |
Convertible debentures are always fully convertible, while non-convertible debentures are only partly convertible Convertible debentures are not issued by companies, while non-convertible debentures are Convertible debentures can be converted into shares, while non-convertible debentures cannot Convertible debentures offer higher interest rates than non-convertible debentures |
Convertible debentures can be converted into shares, while non-convertible debentures cannot |
The correct answer is option 3- Convertible debentures can be converted into shares, while non-convertible debentures cannot. The primary distinguishing feature between convertible debentures and non-convertible debentures is their convertibility: Convertible Debentures: Debentures which are convertible into equity shares or in any other security either at the option of the company or the debentureholders are called convertible debentures. These debentures are either fully convertible or partly convertible. Non-Convertible Debentures: The debentures which cannot be converted into shares or in any other securities are called non convertible debentures. Most debentures issued by companies fall in this category. |
