Match list I with list II and choose the correct ans from the options given below:
| LIST 1 | LIST 2 |
| A) Bearer debentures | I) No specific interest rate |
| B) Zero coupon rate debentures | II) No redemption till winding up of company |
| C) Perpetual debentures | III) No specific charge on assets of company |
| D) Unsecured debentures | IV) Interest is paid to person who produces interest coupon |
Answer & explanation
Correct answer: option 3
The correct answer is option 3- A-IV, B-I, C-II, D-III.
| LIST 1 | LIST 2 |
| A) Bearer debentures | IV) Interest is paid to person who produces interest coupon |
| B) Zero coupon rate debentures | I) No specific interest rate |
| C) Perpetual debentures | II) No redemption till winding up of company |
| D) Unsecured debentures | III) No specific charge on assets of company |
*Bearer debentures- On basis of Transferability, Debentures can be either registered or bearer.Registered debentures have the holder's details recorded with the company and can only be transferred through a formal process. Bearer debentures, on the other hand, can be transferred simply by delivery.
* Zero coupon rate debentures are those debentures which are issued at discount without any specific interest rate. The payment made at the time of redemption includes interest. The difference between the nominal price of the debenture and issue price of debenture is treated as the interest related to the duration of debentures.
*Perpetual debentures- On basis of Redeemability, Debentures may be redeemable or irredeemable (perpetual). Redeemable debentures are repayable to the debenture holders on the specified maturity date. Irredeemable debentures, also known as perpetual debentures, are not repayable within a specific timeframe and are typically repaid only upon the company's winding-up.
*Unsecured debentures- On basis of Security, Debentures can be either secured or unsecured. Secured debentures are backed by specific assets of the company, providing a degree of security to the debenture holders. Unsecured debentures, on the other hand, are not backed by any collateral.