Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

Which debentures can be converted into shares after a specific period?

Options:

Bearer debentures

Convertible debentures

Specific debentures

Zero-coupon rate debentures

Correct Answer:

Convertible debentures

Explanation:

The debentures that can be converted into shares after a specific period are typically referred to as "Convertible Debentures." These are a type of debenture that comes with an option for the debenture holder to convert them into company shares after a predetermined period, as specified in the terms of the debenture issuance. This conversion feature allows debenture holders to potentially become shareholders of the company if they choose to exercise their conversion rights.