When Debentures are convertible into equity shares or in any other security either at the option of the company or the debenture holders is called:

Convertible Debentures

The correct answer is option 1- Convertible Debentures.

Debentures which are convertible into equity shares or in any other security either at the option of the company or the debentureholders are called convertible debentures. These debentures are either fully convertible or partly convertible.

OTHER OPTIONS

• Non-Convertible Debentures: Non-convertible debentures cannot be converted into shares or any other securities. Most debentures issued by companies fall into this category.

• Specific Coupon Rate Debentures: These debentures are issued with a predetermined interest rate, known as the coupon rate. This rate can be fixed or floating, with floating rates often tied to the bank rate.

• Zero Coupon Rate Debentures: Zero coupon rate debentures do not carry a specific interest rate. To compensate investors, these debentures are issued at a substantial discount, with the difference between the nominal value and the issue price representing the interest for the debenture's duration.