The correct answer is option 4- (C), (B), (D), (A).
* Issue of debentures (C)- This is the first step in the lifecycle of debentures. When a company needs to raise capital, it may issue debentures to investors. Debentures are debt instruments issued by companies to raise funds from the public. They come with a fixed interest rate and a specified maturity date.
*Creation of DRR (Debenture Redemption Reserve) (B) - Unlisted companies are required to create a Debenture Redemption Reserve (DRR) when issuing debentures. The purpose of the DRR is to ensure that the company sets aside funds to redeem the debentures at maturity. The amount to be set aside as DRR is 10% of the value of the outstanding debentures.
*Redemption becomes due (D)- After the issue of debentures, there comes a point when the debentures mature, and the company is obligated to repay the amount to the debenture holders. This is known as the redemption date. It's the point at which the company must return the principal amount of the debentures to the debenture holders.
*Payment to debenture holders (A)- Finally, the company makes the payment to the debenture holders, repaying the principal amount along with any accrued interest. This payment can be made in lumpsum or in installments. |
