CUET Preparation Today
What distinguishes redeemable debentures from irredeemable debentures? |
Redeemable debentures are always repaid in lump sum, while irredeemable debentures are repaid in installments Redeemable debentures are never repaid, while irredeemable debentures are always repaid in full Redeemable debentures are repaid at the end of a specific period, while irredeemable debentures have no repayment period except at winding up Redeemable debentures are always repaid at a premium, while irredeemable debentures are repaid at par value |
Redeemable debentures are repaid at the end of a specific period, while irredeemable debentures have no repayment period except at winding up |
The correct answer is option 3- Redeemable debentures are repaid at the end of a specific period, while irredeemable debentures have no repayment period except at winding up
* Redeemable Debentures: Redeemable debentures are those which are payable on the expiry of the specific period either in lump sum or in Instalments during the life time of the company. Debentures can be redeemed either at par or at a premium. * Irredeemable Debentures: Irredeemable debentures are also known as Perpetual Debentures because the company does not give any undertaking for the repayment of money borrowed by issuing such debentures. These debentures are repayable on the winding-up of a company or on the expiry of a long period. |
