Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

A company cannot issue which of the following?

Options:

Irredeemable Debentures

Debentures with Voting Rights

Debentures at Premium

Debentures at Discount

Correct Answer:

Debentures with Voting Rights

Explanation:

Companies typically do not issue debentures with voting rights. Debentures are considered a form of debt financing, and their holders are creditors of the company, not equity shareholders. Voting rights are usually associated with ownership of common stock or equity shares in a company. Debenture holders are typically entitled to receive periodic interest payments and repayment of the principal amount at maturity. They do not have a direct say in the management or decision-making process of the company, such as voting in shareholder meetings.