Debentures represent:

Long-term Debt of the Business

The correct answer is option 2- Long-term Debt of the Business.

Debentures represent the long-term debt of the business.

A company raises its capital by means of issue of shares. But the funds raised by the issue of shares are seldom adequate to meet their long term financial needs of a company. Hence, most companies turn to raising long-term funds also through debentures which are issued either through the route of private placement or by offering the same to the public. The finances raised through debentures are also known as long-term debt.