Which of the following statements is true?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- None of the options 1 and 2.
A debenture holder can receive back money only on liquidation- THIS IS FALSE as A debenture holder receives his money back after the period of expiry for which the debentures were issued.
A debenture holder receives interest only in case there are profits- THIS IS FALSE as An interest on debenture is a charge on profit and hence the debenture holder will receive interest even if there are no profits in the company.
Hence, both 1 and 2 are wrong.