Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
What is the another name for Perpetual Debentures?
Options:
Secured debentures
Irredeemable Debentures
Redeemable dentures after a period of 25 years
None of the above
Correct Answer:
Irredeemable Debentures
Explanation:
Irredeemable debentures, also known as "perpetual debentures" or "unredeemable bonds," are a type of long-term debt instrument issued by a company or entity that does not have a specific maturity date. In other words, these debentures have no fixed redemption date, and the issuing company is not obligated to repay the principal amount to debenture holders at any future point. Instead, debenture holders receive regular interest payments indefinitely, but the principal amount remains outstanding.