The correct answer is option 2- Irredeemable Debentures.
* Irredeemable Debentures is the another name for Perpetual 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.
OTHER OPTIONS
- Secured debentures- Secured debentures refer to those debentures where a charge is created on the assets of the company for the purpose of payment in case of default. The charge may be fixed or floating. A fixed charge is created on a specific asset whereas a floating charge is on the general assets of the company. The fixed charge is created against those assets that are held by a company for use in operations not meant for sale whereas the floating charge involves all assets excluding those assigned to the secured creditors.
- Redeemable debentures- Redeemable debentures are those which are payable on the expiry of the specific period either in a lump sum or in Installments during the lifetime of the company. Debentures can be redeemed either at par or at a premium.
- Unsecured debentures- Unsecured debentures do not have a specific charge on the assets of the company. However, a floating charge may be created on these debentures by default. Normally, these kinds of debentures are not issued.
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